Ripple has pledged to align its XRP sales with legal standards in response to a series of significant legal victories in the past year.
This resolve, revealed in a February 7 blog, comes as the company navigates ongoing legal proceedings and seeks to reinforce its commitment to compliance and transparency within the cryptocurrency industry.
Notably, in July 2023, Ripple secured a critical victory in its legal battle with the U.S. Securities and Exchange Commission (SEC) when the court ruled that XRP is not a security under federal law. Additionally, the court dismissed claims against Ripple executives, vindicating the company and setting a precedent for the legal status of digital tokens in the United States.
While celebrating these legal victories, Ripple acknowledged that certain historical XRP sales, particularly to sophisticated entities, were deemed investment contracts by the court and emphasized its commitment to ensuring compliance with legal standards moving forward.
“Ripple will continue to raise the bar on compliance, ethics, and transparency and invest the resources necessary to ensure compliance with the law as it continues to evolve in this space,” the firm wrote.
The firm’s commitment comes even as the long-drawn court battle enters the settlement phase of the case. Notably, the deadline for filing remedies-related briefs is April 19, 2024; at this point, the court will determine penalties for Ripple’s XRP sales to institutional investors.
While the possibility of a settlement before May exists, it’s contingent on the SEC’s stance regarding Ripple’s potential payment of $770 million, covering both domestic and international XRP sales. However, legal precedent favours Ripple’s position, suggesting that a settlement might be unlikely under such conditions. Notably, pro-Ripple lawyer John Deaton has echoed this stance, stating recently that he does not see a settlement happening under the current terms proposed by the SEC. Last November, the outspoken lawyer predicted a significant decrease in SEC’s settlement sum to $150 million.
Meanwhile, Magistrate Judge Sarah Netburn recently ruled in favour of the SEC by granting their motion, filed in January, which mandates Ripple to furnish audited financial statements for 2022 and 2023—the SEC contended that these financial disclosures are vital in determining the extent of potential civil penalties against Ripple for the institutional sales of XRP.