The Ripple vs. SEC drama just took a dramatic turn, with crypto expert Zach Rector unveiling a potential $3 billion fine for the payments company. This bombshell could mark a turning point in the long-running legal drama.
In a recent YouTube video, Rector painted a grim picture of Ripple and XRP’s future. He suggests that if Judge Torres rules XRP’s On-Demand Liquidity (ODL) sales as “investment contracts,” it could trigger a staggering $3 billion to $3.5 billion disgorgement penalty.
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The SEC’s argument? It claims Ripple sold $3 billion worth of XRP since the lawsuit began, on top of $1.3 billion in alleged unregistered securities from 2013. However, Judge Torres’ ruling, which declared that XRP was not a security, excluded programmatic sales and other distributions, bringing the potential disgorgement down to $777 million.
ODL Sales in the Spotlight
Anticipating an adverse ruling against ODL sales, the Rector foresees Ripple appealing, trusting their legal team to contest such a significant classification.
He contends that labeling ODL investments as contracts is questionable, given that buyers don’t anticipate profits from Ripple’s efforts. In contrast to the prevailing belief, Rector argues that a substantial fine may not necessarily cripple Ripple’s XRP sales.
Nevertheless, the company’s fate will be determined in the ongoing discovery phase, and the outcome could shape Ripple and XRP’s trajectory, and potentially create more regulatory uncertainty for XRP and the broader crypto market.
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What’s Next for Ripple and XRP?
The SEC’s recent motion demands two key documents: Ripple’s post-complaint ODL sales contract and audited 2022-2023 financials. Ripple requested two days to meet up with the SEC’s demands, and the company’s response is due on January 19 with their opposition motion to follow.
Read Also: Ripple Unveils Seven Bold Crypto and XRP Lawsuit Predictions for 2024
This escalation came after weeks of silence, and it has reignited speculation on the potential end to the XRP lawsuit. The final move lies with the SEC on April 29, 2024, when they submit their final remedies proposal. Then, the court will decide Ripple’s fate.
With a potential $3 billion fine looming and the discovery phase underway, the next few months will be crucial for Ripple.
If the outcome does not favor Ripple, its CEO Brad Garlinghouse, has expressed his willingness to take the case to the Supreme Court if necessary. Although we are close to the end of the legal proceedings, the final stretch will surely be intriguing.
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