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- The SEC has asked the court to compel Ripple Labs to produce certain documents relating to XRP sales to institutional investors.
- There’s renewed interest in the case amid speculation that an XRP-Spot ETF is in the pipeline.
XRP investors are once again been drawn to the U.S. Securities and Exchange Commission (SEC) vs. Ripple case following activity on Thursday. According to court filings, the regulatory agency has filed a motion to compel. The SEC is asking the court to order Ripple Labs to produce financial statements.
#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has filed a Motion to Compel @Ripple to produce (a) its financial statements for the years 2022-2023; and (b) its post-Complaint contracts governing “Institutional Sales."https://t.co/Egc4wpf7UY
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) January 11, 2024
These documents include financial statements for 2022-2023 and post-complaint contracts governing institutional sales. As earlier reported, both parties must complete remedies-related discovery by February 12. This will be followed by an SEC reply brief before the presiding Judge Analisa Torres can decide the penalty for selling XRP to US institutional investors.
Experts have proposed that the SEC will seek $770 million in penalties hence the same figure has been suggested as the amount the SEC will seek if any settlement discussions are held. Access to the financial statements from Ripple will give the SEC an estimate of the sales proceeds and expenses relating to XRP sales. This could lead the agency to revise its asking price, but equally, the Judge is expected to reduce the $770 million penalty significantly.
Last year, Ripple Labs enjoyed a string of minor victories against the SEC. None was as significant as the Court’s July 13 decision that the crypto asset XRP is not a security. The ruling determined that XRP sales on exchanges were not securities, XRP sales by Ripple executives were not securities, and XRP distributions to developers, charities, and employees were not securities. The only bone of contention remains the institutional XRP sales.
Another landmark win was the SEC dropping all charges against Ripple executives Chris Larsen and Brad Garlinghouse on the case related to XRP sales. For experts, all these are signs that the SEC is quickly losing the case that it brought forward nearly 3 years ago. Many are confident that it will end with Ripple paying an acceptable fine or the SEC losing the case outright in court. Either way, this will pave the way for the continued development and growth of Ripple and XRP.
XRP ETF in The Works
The recent developments come amidst discussions of an XRP ETF launching in the market. In a recent appearance on Bloomberg Crypto, Steven McClurg of Valkyrie Investments shared thoughts on potential XRP ETF applications. He hinted at the likelihood of increased applications for Ethereum and even Ripple, pointing to recent developments such as Grayscale’s inclusion of Ripple in its publicly traded securities trust.
Although the digital asset enjoys regulatory clarity, it remains unclear if the SEC would approve an XRP spot ETF due to SEC Chair Gary Gensler’s “apparent contempt for mostly all digital assets aside from Bitcoin.”
Based on my conversations with industry around this today, there's definitely differing views on whether or not the @SECGov would approve a single-product $XRP spot ETF.
Bulls argue that XRP is the only digital asset that has received any kind of "regulatory clarity" from the… https://t.co/DcQTuNaKiZ
— Eleanor Terrett (@EleanorTerrett) January 9, 2024
In the past 24 hours, XRP has recorded a marginal drop of less than 1% to trade at $0.59. On the weekly charts, the 6th-ranked coin is up by nearly 4%.
