Ripple Files New Motion, Denies Allegations of XRP Price Suppression
Ripple has submitted a fresh motion in its ongoing legal battle against the U.S. Securities and Exchange Commission (SEC). The filing, made on May 29, refutes claims that Ripple manipulates the price of XRP through discounted over-the-counter (OTC) token sales.
According to the filing, Ripple no longer engages in OTC XRP sales transactions. Instead, the company sells XRP to customers through its On-Demand Liquidity (ODL) product, which does not offer any discounted pricing like the OTC deals.
In its filing, Ripple stated, “Ripple’s current sales of XRP to customers for use in connection with Ripple’s ODL product do not have any of the relevant terms of the over-the-counter contracts, such as discounts offered to sophisticated counterparties.”
This statement challenges the allegation that Ripple intentionally suppresses the price of XRP by selling tokens at a discount to retail investors through OTC sales.
Legal analyst Bill Morgan pointed out that the evidence suggests Ripple did not provide any pricing discounts to its ODL customers.
Ripple’s latest filing also argued that ODL sales of XRP have no impact on the token’s price, which has consistently performed worse than Bitcoin and the wider crypto market.
Additionally, Ripple claimed that its financial statements were irrelevant to the court’s analysis, as the company has the means to pay any potential fines and penalties imposed by the SEC.
This latest filing comes after the SEC opposed Ripple’s motion to seal and redact certain details in the parties’ briefings on remedies. Ripple argued that revealing sensitive financial information could harm its business operations.
To fully comprehend recent developments, it is crucial to understand the background of Ripple’s last court filing, as shared by defense attorney James Filan on May 15.
The filing centered around Ripple’s Motion to Seal, which aims to protect a selection of documents related to the SEC’s Motion for Judgment and Remedies. Ripple seeks to seal sensitive and confidential materials, such as audited financial statements and documents outlining existing business relationships.
Ripple argued that these audited financial statements and related documents are non-public, justifying the need for their redaction. Ripple’s Chief Financial Officer, Jonathan Bilich, filed a declaration in support of the company’s Motion to Seal, emphasizing the confidential nature of the information.
As the legal battle between Ripple and the SEC enters its final stages, speculation about the potential penalties for Ripple’s alleged violation of U.S. securities laws is growing. A court ruling in favor of the SEC’s proposed $2 billion penalty, which Ripple has already opposed and suggested a $10 million alternative, along with an injunction prohibiting XRP sales to institutional investors, could significantly impact the demand for the XRP cryptocurrency.
Furthermore, a corrective penalty could prompt the SEC to appeal against the ruling on Programmatic Sales of XRP. It is worth recalling that in October 2023, the SEC dropped charges against Ripple’s founder and CEO after an interim appeal was rejected by the court, forcing the regulator to wait until the conclusion of the case to appeal the ruling on XRP sales.
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