The legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple is finally entering its final phase, but there are still many ambiguities surrounding the current legal status of XRP and Ripple's sales transactions. Cryptocurrency expert Vincent Van Code has provided insights into this issue, analyzing court decisions and remaining options that Ripple may take in the future to ensure that users are well-informed about information and new trends.
XRP Is Not a Security, Only True in the Open Market
In a detailed article, Van Code emphasized that Judge Analisa Torres decided in July 2023 that XRP, when traded on exchanges or in programmed transactions, is not a security. Judge Torres highlighted that XRP, as a digital token, is not a 'contract, transaction, or scheme' that meets the criteria of an investment contract under the Howey test.
However, the court has determined that Ripple's direct sales transactions to institutions are forms of unregistered securities offerings, primarily because sophisticated investors buy XRP with the expectation that profits will be tied to Ripple's efforts.
Ripple Has Paid $125 Million, What’s Next?
According to Van Code, Ripple has paid a $125 million fine, which is currently held in an escrow account pending final resolution. Despite a restraining order limiting Ripple from conducting sales transactions to institutions, the company is still allowed to sell XRP in open markets without any legal issues.
With current regulations, Ripple still has certain options to adjust its operations. The company can continue to sell XRP under naturally legal conditions, ensuring the necessary safety and transparency.
Can Ripple Continue Selling to Institutions?
The answer is yes, but with some restrictions. Van Code presents two legal options that Ripple can take to restore XRP sales transactions to institutions:
Registered as a security offering under the U.S. Securities Act of 1933.
Using exemptions such as Rule 506(b) or Rule 506(c). If used, Ripple must file Form D with the SEC within 15 days of the sale.
These processes for private placements are very common and do not imply misconduct, but they come with strict compliance regulations.
XRP Price Prediction: What Will Happen Next?
Despite facing legal difficulties, XRP's price movements remain positive:
Increased by 361.6% in the past year
Increased by 3.5% in the past 7 days
Increased by more than 5.1% in the past 24 hours
Van Code believes that institutional investors are still interested, viewing XRP as a long-term investment. He warns that short-term price drops are often traps that cause inexperienced investors to give up before a rally.
Ripple is operating legally and selling XRP within the necessary compliance framework. Don't let short-term price volatility shake your confidence.
Final Thoughts
The lawsuit between Ripple and the SEC may be nearing its conclusion, but restrictions on sales to institutions still exist, at least for the time being. XRP continues to maintain strength in the market, with increasing investor confidence and legal clarity. As Ripple seeks legal sales pathways, this token may witness broader adoption and stronger institutional capital flow in the coming months.
Source: https://tintucbitcoin.com/ripple-and-the-consequences-of-the-sec-lawsuit/
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