Ripple and SEC Legal Clash Over ODL Sales
In the ongoing legal battle between Ripple and the SEC, lawyer Bill Morgan has highlighted a crucial issue related to the sales of XRP to On-Demand Liquidity (ODL) customers. He predicts that the conflict between Ripple and the SEC will intensify, focusing on the crypto payments firm’s ODL sales. This follows the SEC’s successful motion to compel Ripple to disclose its financial statements for 2022-23.
Importance of ODL Sales in Ripple vs. SEC Case
Morgan explains that ODL customers who use Ripple’s technology are not subject to an injunction. However, if Ripple sells XRP to these customers without registering, it could face restrictions. He suggests that this issue might become central during the appeal or remedies phase of the lawsuit. The SEC’s reply brief on the motion indicates that Ripple intends to strongly advocate for its position on institutional sales during this phase.
Challenges Faced by Ripple in Overseas Sales
Morgan also points out that ODL can operate without customers directly purchasing XRP from Ripple, as they can acquire it from secondary markets. He highlights potential challenges in the case of overseas sales to ODL customers and emphasizes the importance of alternative sales mechanisms for Ripple in the US market if direct sales are restricted. The SEC is aware of these issues, which could pressure Ripple to ensure compliance with legal and commercial requirements in future sales.
SEC Gains Advantage in Case
In January 2024, during the ongoing Ripple vs. SEC lawsuit, the SEC filed a motion seeking approval from Judge Sarah Netburn’s Magistrate Court. The motion aimed to compel Ripple to disclose its financial statements for 2022-23 and provide information about post-complaint contracts governing institutional sales of XRP. The court granted the SEC’s requests, allowing the investigation into Ripple’s financial activities and XRP sales during the specified timeframe.
Hot Take: Ripple vs. SEC Legal Clash Over ODL Sales
The legal dispute between Ripple and the SEC is expected to intensify, with ODL sales becoming a crucial point of contention. Ripple’s ability to sell XRP to ODL customers without registering could face restrictions, and this issue will likely be central during the appeal or remedies phase of the lawsuit. Overseas sales and alternative sales mechanisms also pose challenges for Ripple. The SEC has gained an advantage by obtaining approval to compel Ripple’s disclosure of financial statements and information about institutional sales contracts. This ongoing battle will shape the future of Ripple’s operations in the crypto industry.
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