Ripple is under fire with a newly filed motion from the SEC. What’s next for XRP?
In a significant move in the ongoing legal dispute between the U.S. Securities and Exchange Commission (SEC) and Ripple Labs Inc., the SEC has filed a petition in the Southern District of New York.
On January 11, the agency forced Ripple to provide financial documents and details about its XRP sales. In particular, the SEC has characterized this action as critical to determining the appropriate relief for matters it deems necessary.
Specifically, the submitted application states a request for Ripple’s financial statements from 2022 to 2023. It also requests a post-complaint agreement that governs what the SEC calls “institutional sales.” Judge Analisa Torres previously ruled, on her motion, that these sales were unregistered public offerings and sales of securities.
Despite engaging in a resolution-focused discovery process, Ripple has strongly opposed releasing discovery documents following the complaint. However, the SEC refuted Ripple’s grounds for rejection, citing court orders.
Historical Background of SEC vs. Ripple
On July 13, 2023, Judge Analisa Torres ruled that Ripple violated Section 5 of the Securities Act of 1933 by selling unregistered XRP primarily to institutional buyers. Contracts offering XRP as a security rather than a currency or commodity generated over $700 million in revenue. Ripple’s contracts were important in determining the illegality of these transactions.
In response, Ripple issued a market report to clarify misconceptions, claiming that most of its post-SEC sales involved parties outside the United States. Therefore, Ripple’s ongoing business appeared to be unaffected by the US legal proceedings. Nonetheless, some of Ripple’s XRP offers and sales were not deemed security transactions by the courts.
On November 14, the SEC sent several requests to Ripple, focusing solely on relief for previous violations. However, Ripple refused to submit documents or respond to inquiries. Now, the SEC is seeking Ripple’s financial statements for the 2022-2023 post-complaint sale agreement. After the initial complaint, certain proceeds from the sale of XRP will be added.
XRP price analysis according to motion
Meanwhile, XRP has barely moved from its January 11 candlestick price of around $0.59. The token traded in a range between $0.586 and $0.623, with a slight downward trend in hourly trading.
Interestingly, Ripple disbursed 100 million XRP worth about $56 million this week as part of its monthly unlocks. The company still has an additional 100 million tokens out of the 200 million XRP it parked in January.
All things considered, this latest move is putting additional pressure on Ripple, which could impact the sales and market value of XRP.
disclaimer: The content on this site should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
Source: https://finbold.com/ripple-is-under-the-gun-with-a-newly-filed-motion-by-the-sec-whats-next-for-xrp/
