Ripple Provided Major XRP Price Discounts To Select Investors, SEC Claims
26 Mars 2024 - 10:00PM
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In the XRP lawsuit, the US Securities and Exchange Commission (SEC)
filed its motion for remedies and entry of final judgment against
Ripple, proposing a suite of penalties that includes injunctive
relief, disgorgement of profits, and a notable $2 billion in civil
penalties today. But that’s not the whole story as the 210-page
document contains some interesting statements and assertions.
#XRPCommunity #SECGov v. #Ripple #XRP The @SECGov has filed its
Motion for Remedies and Entry of Final Judgment, its Memorandum of
Law in Support of that Motion, and its "Proposed"
Judgment.https://t.co/uPlpJ7Tmon — James K. Filan 🇺🇸🇮🇪 (@FilanLaw)
March 26, 2024 Did Ripple Favor Select Institutional Investors? One
of the assertions made in the SEC document and pointed out by XRP
community lawyer Bill Morgan was a key revelation that Ripple
engaged in discriminatory pricing practices, offering substantial
discounts on XRP tokens to a select group of institutional
investors. This practice, the SEC alleges, created an uneven
playing field, benefiting certain “favored” investors at the
expense of others. Related Reading: Top Analyst’s Bold Prediction:
XRP Set To Skyrocket 1,500% XRP community lawyer Bill Morgan
provided a summary of this aspect, highlighting the potential
damage to Ripple’s standing in the eyes of institutional investors.
“The SEC’s brief is a possible problem for Ripple beyond this case.
The SEC is able to argue that there were two groups of
institutional sales investors (it calls them favored and unfavored)
and Ripple offered one group significant discounts in XRP price
over the other group that did not receive them,” Morgan noted via X
(formerly Twitter). He further delved into the SEC’s claim that
such practices harmed the “unfavored” group of investors to the
tune of $480 million, a figure based on assumptions that Morgan
suggests need thorough examination. “The evidence of causation of
this alleged harm seems thin,” he added. The SEC’s filing goes on
to argue that Ripple’s sales tactics, specifically the discounted
sales to certain investors, directly contributed to downward
pressure on the overall market price of XRP. This point is not just
a matter of regulatory compliance but also raises the specter of
legal action from those institutional investors who may feel
aggrieved by not being privy to the same discounts. Related
Reading: Is Ripple Behind The XRP Price Crash? Massive Selling
Spree Sparks Concern Morgan also touched upon the ramifications of
these actions being classified as investment contracts by the SEC,
saying, “As these sales to institutions were found to be investment
contracts, it means that this offering of discounts to some but not
other institutions is the very disclosure according to the SEC that
should have, and would have been made to the institutions, if the
sales to institutions had been registered.” He further noted that
these claims by the SEC are also not great for the reputation of
Ripple. “Not sure this revelation is great for Ripple’s reputation
with institutional investors,” Morgan remarked. Ripple CLO Alderoty
Responds Ripple’s Chief Legal Officer, Stuart Alderoty, also issued
a broad response to the SEC’s filing via X, vehemently disputing
the narrative presented by the regulatory body. Alderoty stated,
“Our response will be filed next month, but as we all have seen
time and again, this is a regulator that trades in statements that
are false, mischaracterized and designed to mislead.” He further
attacked the SEC for its illegitimate reasoning, stating: “They
stayed true to form here. Rather than faithfully apply the law, the
SEC remains bent on wanting to punish and intimidate Ripple – and
the industry at large. We trust the Court will approach the
remedies phase fairly.” At press time, XRP traded at $0.64365.
Featured image from Shutterstock, chart from TradingView.com
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