Ripple Labs Inc. has made clarifications regarding the sale and pricing of its XRP tokens. 

Addressing concerns of price suppression, the company emphasized that it no longer sells XRP tokens over-the-counter (OTC). 

#XRPCommunity #SECGov v. #Ripple #XRP @Ripple has filed a reply letter in further support of its Motion to Seal documents in connection with the @SECGov’s Motion for Judgment and Remedies. pic.twitter.com/NeuFZII1m8

— James K. Filan (@FilanLaw) May 29, 2024

Ripple’s Sales Practices Under Scrutiny

Ripple’s current sales strategy focuses on providing XRP tokens to customers using its On-Demand Liquidity (ODL) product. The company clarified that these sales do not include the terms often associated with OTC contracts, such as discounts to sophisticated investors. This distinction was highlighted in a letter to the court to dispel accusations that Ripple has been manipulating the XRP market by offering discounted tokens to select parties.

Legal analyst Bill Morgan supported Ripple’s position, describing the statement as a decisive rebuttal to claims of market manipulation. According to Morgan, Ripple’s evidence confirms that its ODL sales are conducted without price discounts, contrary to the terms previously found relevant in the court’s decision regarding OTC contracts. 

Thanks James. Ripple points out what by now should be obvious. Sales of XRP to ODL customers do not have any of the terms the Court found relevant in deciding over the counter contracts were investment contracts such as price discounts. Ripple offers no discounts to ODL… https://t.co/3S2jZee03u pic.twitter.com/vruJTuHL2S

— bill morgan (@Belisarius2020) May 29, 2024

Moreover, Morgan emphasized that these ODL sales have a neutral effect on the XRP token price, which has consistently lagged behind Bitcoin and the broader cryptocurrency market.

Confidential Financial Information Controversy

The SEC argues that Ripple’s current financial status is crucial for determining potential remedies for the firm’s past actions. Ripple, however, contends that its financial health is irrelevant to the court’s analysis and insists that disclosing such sensitive information could harm its business operations.

The company’s legal team argued that the SEC’s request lacks justification and that Ripple has never claimed an inability to pay any potential fines or penalties. Ripple is pushing for the court to grant its request to seal confidential financial information, stating that revealing these details could provide undue advantage to future contractual counterparts by exposing the terms of past agreements.

The SEC’s position asserts that Ripple’s historical contracts hold ongoing relevance. Ripple counters this by maintaining that the terms of its contracts are confidential and that the company has altered its sales approach since those contracts were established. The crypto firm noted that the court’s prior ruling determined that XRP is not a security. Therefore, the sales amounts and prices differ from those cited in investment contract cases.

Furthermore, Ripple’s response emphasizes that the SEC’s argument does not provide a solid basis for forcing the disclosure of sensitive financial documents. The firm argues that its past contracts are no longer pertinent due to changes in its sales practices, which now focus solely on ODL transactions without the discount terms previously associated with OTC deals.

Legal Proceedings and Future Implications

In its latest submission to Judge Analisa Torres, Ripple seeks to clarify and counter the SEC’s recent motions. The company reiterates that many of the SEC’s arguments were already addressed in its initial filings. Ripple’s legal team stresses the importance of protecting its confidential financial data, arguing that the court should not compel the disclosure based on unsubstantiated claims by the SEC.

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