Skip to content

Ripple is under the gun with a newly filed motion by the SEC; What’s next for XRP?

Ripple is under the gun with a newly filed motion by the SEC; What’s next for XRP?

In a significant move in the ongoing legal skirmish between the Securities and Exchange Commission (SEC) and Ripple Labs Inc., the SEC has filed a motion with the Southern District of New York.

On January 11, the agency sought to compel Ripple to yield financial documents and details regarding its XRP sales. In particular, the SEC framed the action as critical for determining appropriate remedies for what they deem necessary.

Notably, the filed motion specifies a request for Ripple’s financial statements from 2022 to 2023. Moreover, request post-complaint contracts that dictate what the SEC calls “Institutional Sales.” Judge Analisa Torres previously determined these sales to be unregistered offerings and sales of securities, according to the motion.

Ripple, despite its participation in the remedy-focused discovery process, has staunchly opposed revealing post-complaint discovery documents. However, the SEC refutes Ripple’s basis for refusal, citing a court order.

SEC vs. Ripple historical background

On July 13, 2023, Judge Analisa Torres ruled that Ripple violated Section 5 of the Securities Act of 1933 through unregistered XRP sales, primarily to institutional buyers. The sales amounted to over $700 million, with contracts that suggested XRP as a security, not a currency or commodity. Ripple’s contracts were significant in determining the illegality of these transactions.

In response, Ripple issued a Market Report attempting to clarify misconceptions, asserting that most of their sales post-SEC lawsuit involved parties outside the United States. Therefore, Ripple’s continued business seemed unaffected by the U.S. legal proceedings. Despite this, some of Ripple’s XRP offers and sales were not considered security transactions by the court.

On November 14, the SEC served multiple requests to Ripple focused solely on the remedies for previous violations. However, Ripple declined to produce any documents or respond to any interrogatories. Now, the SEC seeks Ripple’s financial statements for 2022-2023, post-complaint sales contracts. In addition to the specific proceeds from XRP sales after the initial complaint.

XRP price analysis following the motion

In the meantime, XRP has barely moved from its price on January 11 opening candlestick, at around $0.59. The token has traded in a range between $0.586 and $0.623, slightly trending downwards in the hourly action.

XRP hourly price chart. Source: TradingView

Interestingly, Ripple spent 100 million XRP worth approximately $56 million this week as part of its monthly unlocks. The company still holds another 100 million tokens from the 200 million XRP kept in January.

All things considered, this recent motion puts extra pressure on Ripple, which could affect XRP’s selling and market value.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10.

  • Copy top-performing traders in real time, automatically.

  • Regulated by financial authorities including FCA and FINRA.

2.8 Million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts