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- According to Attorney Jeremy Hogan, Ripple’s XRP sales to institutions will be unaffected by the recent ruling as long as they are included in an exemption to registration.
- The XRP community has celebrated the ruling, with the token shooting 23% in the past day to add $6 billion to its market cap.
On Wednesday, Judge Analisa Torres finally issued a ruling in the Ripple vs. SEC lawsuit, ordering the blockchain payments company to pay the regulator $125 million in civil penalties. Immediately, the XRP community broke into celebration, as the penalty was way below the $2 billion that the SEC initially sought.
Since then, legal experts have been helping the community break down the implications of the ruling on the token, and according to one of the most respected minds in the crypto legal space, the impact will not be as far-reaching as initially feared.
Attorney Jeremy Hogan took to X to break down the ruling. First, he noted that most of Ripple’s sales were outside the US, and these were unaffected by the ruling. The lawyer stated that the company can continue engaging in these sales despite the ruling.
I see lots of questions re what the injunction means for ODL sales. I don't see it changing the status quo AT ALL, for the following reasons:
1. As Ripple has stated, the majority of its XRP and ODL sales are outside the U.S. jurisdiction and not subject to the ruling. Those… pic.twitter.com/3GimWEcp0c
— Jeremy Hogan (@attorneyjeremy1) August 7, 2024
One of the concerns after the ruling was whether Ripple could still sell to American institutions. While it can generate enough funds selling outside the US market, local sales are important in offering users enough liquidity and building on the networks that Ripple and the rest of the XRP ecosystem have established over the past decade.
According to Hogan, these sales can continue, albeit with a minor tweak. He stated:
Ripple CAN sell XRP to Institutions as long as it sells it under an exemption to registration. There are like 5 major exemptions, and it’s much easier to fit into an exemption when selling to a business.
The lawyer also noted that the ruling had significantly failed to include on-demand liquidity (ODL) sales in the wording. This means that if the SEC believes that Ripple has failed to abide by the ruling’s stipulations, it would have to file for contempt in court and present its evidence. However, the company can argue that ODL sales have no expectation of profits as the participants only hold the tokens for seconds and implicitly for the purpose of facilitating payments.
Hogan further believes that since Ripple’s lawyers have been sitting on the summary judgment for a year now, the company has most likely made changes to how it handles XRP sales locally. These changes will likely stay in place after yesterday’s ruling, and the SEC is unlikely to file another legal action against the firm.
Meanwhile, XRP has been on a parabolic run since the judge delivered the ruling, which most traders viewed as a victory for Ripple. At press time, the token trades at $0.6154, surging 23% in the past day, the highest rise in that time for the top 200 coins.
Since the ruling was delivered, XRP has added $6 billion to its market cap, which now stands at $34.465 billion and looks set to flip USDC once again to reclaim the sixth position on the charts. Some analysts now believe the token can hit $20 in a year’s time.
