The SEC and the company are keeping information about XRP sales and Ripple’s financial performance confidential. The outcome of the XRP case and other cryptocurrency laws may be influenced by the U.S. House’s vote on FIT21.
Both Ripple Labs and the SEC have presented their arguments in the ongoing XRP case, and now the remedies phase has begun. There are disagreements about sealing certain financial data from Ripple and the sales of XRP to institutional investors after the complaint was filed.
Everyone involved in the case, including the plaintiff, defendant, and interested parties, is eagerly awaiting Judge Torres’ final ruling, which is expected to come soon after the ruling on the motion to seal. Experts believe that the ruling may be delivered earlier than expected, possibly in the third quarter of 2024.
Recently, the U.S. House of Representatives voted on the Financial Innovation and Technology for the 21st Century Act (FIT21). This legislation marks a significant step towards establishing a regulatory framework for the issuance and trading of digital assets. Its aim is to define the roles of the SEC and the Commodity Futures Trading Commission (CFTC) in regulating the cryptocurrency sector in the United States.
If the cryptocurrency bill becomes law, it will have an impact on major participants like Coinbase and Binance, as well as other ongoing legal proceedings. The architecture of the crypto bill has been influenced by Judge Torres’ summary ruling in July 2023, which could also affect the XRP litigation.
Interestingly, one provision of the crypto bill supports Judge Torres’ conclusion that XRP is not a security. According to the bill, a digital asset that is transferred or sold under an investment agreement does not automatically become a security solely based on the agreement.
Lawyer Bill Morgan clarified that the legislation is not retroactive, dispelling rumors that XRP would not be considered decentralized under the new rules. Since the court has already ruled that XRP is not a security, the SEC has stated that it will not appeal the decision.
Ripple has requested that certain evidence be kept hidden from the public, but the SEC has objected, arguing that the redaction requests would conceal crucial information. This information, which includes details about Ripple’s assets, sales, income, expenses, and discounts offered to institutional investors, is crucial for court rulings and public understanding of the penalties.
Ripple claims that it should only be liable for civil penalties up to $10 million, while the SEC is seeking a total of $2 billion in charges. However, the final amount is likely to be lower, as courts have historically rejected the initial demands made by either side.
As of the time of writing, XRP was valued at approximately $0.535 on CoinMarketCap, experiencing a slight decrease of 0.48% over the previous day. Despite this minor decline, XRP has shown a bullish trend with a 4.03% increase in the past week. Additionally, since Coinbase relisted XRP, 20 million New Yorkers are now able to trade the cryptocurrency.
Bill Morgan believes that Ripple will mostly succeed in keeping the evidence sealed. However, he emphasized that while the SEC is seeking a permanent injunction to stop ODL sales, none of the reduced sales to institutions were made through ODL contracts.
