Attorney John Deaton, who has been an important part of the ongoing legal battle between Ripple and the SEC, recently spoke at the first annual onXDC Live blockchain industry conference in Texas. Speaking at the event, Deaton opened up about a crucial legal aspect that casts a shadow over the SEC’s actions – the concept of qualified immunity.
In simple terms, qualified immunity shields government officials, including those at the SEC, from personal liability for actions taken in the course of their official duties. Deaton highlights that this immunity can present challenges when seeking accountability for regulatory decisions.
Ripple vs. SEC: The Smoking Gun Quest
He stressed that in order to challenge the qualified immunity and sovereign immunity enjoyed by the SEC, a “smoking gun” is needed – compelling evidence that shows negligence on the part of SEC officials. This evidence could potentially lead to the dismissal of immunity claims and pave the way for a civil conspiracy case against the SEC.
He draws attention to the case involving Bernard Madoff, where investors sued the SEC for its failure to take action despite being warned multiple times about the Ponzi scheme. The judge dismissed the case, reinforcing the challenges of holding the SEC accountable.
Appeals, Settlements, and Future Predictions
Deaton clarifies the status of the appeal process in the Ripple case. He highlights that while an interlocutory appeal motion is in progress, a full appeal might only take place after the trial, extending the timeline significantly.
Deaton speculates on the potential outcomes, ranging from SEC officials taking the stand to negotiating a settlement. The latter option hinges on the resolution of the Coinbase case, where the SEC’s stance on various cryptocurrencies’ securities status could influence the XRP settlement.
“There is no appeal right now, all the judge did was allow them to write a motion for an appeal for an interlocutory appeal. I predict she denies it and then when she denies it they have to wait for a full appeal which, after the case, would be sometime in late 2024, which would take another 18 months, which would mean we’d be into late 2025 before the second circuit could ever hear it.”