The ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) has taken a surprising turn.
As earlier reported by Times Tabloid, the SEC has requested a hefty $2 billion fine against Ripple. This significant development adds another layer of complexity to a case with far-reaching consequences for the cryptocurrency industry.
Read Also: XRP Case: Legal Expert Shares Updated Prediction For Ripple-SEC Lawsuit
Fred Rispoli, a legal expert and vocal supporter of XRP emphasizes the seriousness of the SEC’s financial penalty request. A critical point of contention revolves around whether the SEC can demonstrate actual harm to investors. Ripple maintains that the SEC’s claims lack merit and questions the agency’s adherence to legal procedures.
#XRPcommunity The SEC's motion for judgment has been publicly filed. TLDR: @SECGov is following the playbook I outlined two months ago. @digitalassetbuy @DigPerspectives @MetaLawMan @attorneyjeremy1 @JohnEDeaton1 @BCBacker @TheReaperCoin @RuleXRP
1/10https://t.co/47HFEaAwb0— Fred Rispoli (@freddyriz) March 26, 2024
According to Rispoli, the potential outcomes of this case are two-fold, suggests Rispoli. There is a 40% chance of a favorable settlement for Ripple after a final ruling. Alternatively, the case could drag on, potentially hindering Ripple’s operations.
Discounted XRP Sales and Market Dynamics
A key aspect of the SEC’s case hinges on Ripple’s sales of XRP at discounted rates to institutional investors. Rispoli expresses concern about the potential repercussions of these sales on XRP’s market health, particularly for retail investors and the broader cryptocurrency ecosystem.
Discounted sales to a select group of buyers could create an uneven playing field. Retail investors who purchase XRP on the open market may be at a disadvantage compared to institutions that receive a lower price point. This could skew market dynamics and raise concerns about fairness.
Ripple’s Business Practices Under Scrutiny
Another critical issue is the status of Ripple’s ongoing XRP sales. The court’s decision on the legality of these transactions, particularly post-lawsuit, will significantly impact Ripple’s future business model.
Questions linger regarding the firm’s revenue streams and the nature of its contractual agreements with institutional buyers. Clarity on these matters is crucial for understanding the firm’s financial health and long-term XRP sales strategy.
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— TimesTabloid (@TimesTabloid1) July 15, 2023
Read Also: Financial Expert Urges Investors to Consider XRP Value Rather Than Price. Here’s the Meaning
Institutional Influence on XRP’s Price
Interestingly, Rispoli raises the possibility that discounted sales to institutional buyers could manipulate XRP’s price trajectory. Large-scale investors have the potential to influence market movements significantly, and the SEC’s case against Ripple could set a precedent for regulating such practices in the cryptocurrency space.
Ripple has consistently denied the SEC’s allegations and maintains that XRP is a utility token, not a security. The company is likely to contest the $2 billion fine request vigorously.
The judge’s upcoming ruling on the legality of XRP sales and the SEC’s potential pursuit of a full-blown trial will be pivotal in determining the outcome. This case has the potential to cast a long shadow over the crypto industry, impacting regulations, market dynamics, and investor behavior.
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