The cryptocurrency community is currently embroiled in a debate over Ripple’s rights to sell XRP tokens, sparked by an exchange between XRP advocate Bill Morgan and a cryptocurrency analyst known as “Darkhorse” on social media platform X.
This discussion takes a closer look at the legal complexities and market implications of Ripple’s actions regarding the sale of XRP.
There is nothing stopping Ripple from selling XRP. Anyone can sell assets they own. The question is whether XRP sales and offerings in the United States will need to be registered with the SEC. If Ripple sells XRP programmatically like it has done in the past, there will be no need to register the sale… https://t.co/vHbeCTpeP0
— Bill Morgan (@Belisarius2020) January 16, 2024
Legal Debate: Ripple’s Right to Sell XRP
Bill Morgan, a staunch defender of XRP, argued that Ripple has no legal restrictions on “selling XRP tokens except in the context of institutional sales.”
The claim was in response to cryptocurrency analyst Darkhorse’s reference to Judge Analisa Torres’ ruling in July 2023, which, according to the analyst, did not allow Ripple to sell XRP.
While Morgan argued that Ripple can legally sell its XRP holdings, he made it clear that the company’s sale should not be considered an investment contract under U.S. securities laws.
“There is nothing stopping Ripple from selling XRP,” Morgan added. “The question is whether the sale and offering of XRP in the United States will need to be registered with the Securities and Exchange Commission (SEC).”
After Judge Torres’ decision, another user of X highlighted an important point about Ripple’s XRP sales. In the judge’s opinion, these sales “may now be considered securities transactions.”
The user explained that this change in classification is due to the fact that Ripple’s participation in XRP is now publicly acknowledged, so it can expect an increase in value due to the payments company’s activities.
Previously, these sales were not classified as securities transactions due to a “lack of evidence” that retail buyers were aware of Ripple’s role in XRP. However, this changed Judge Torres’ decision and made Ripple’s participation a publicly acknowledged fact.
In response, Morgan said that despite this public perception, the performance of XRP price over the past five years indicates that it may not be “reasonable” to expect profits from Ripple’s efforts. XRP defenders hinted that those who bought XRP with such expectations after the July 13 decision “may be being irrational or in need of help.”
Whether or not XRP’s price performance over the past five years has been publicized suggests that no one who acquired XRP after the July 13 decision thought Ripple’s efforts would benefit from rising asset prices do. ‘ And maybe… https://t.co/WhKCyGWpA0
— Bill Morgan (@Belisarius2020) January 17, 2024
Ripple XRP Sales and Market Impact
Notably, this controversy arose after Ripple recently transferred 80 million XRP tokens worth approximately $46.18 million to an undisclosed wallet. The transaction, reported by blockchain tracking service Whale Alert, sparked speculation in the XRP community.
Amid these developments, XRP’s market performance has fluctuated. The asset has fallen 1.5% in the last 24 hours, dropping its price to $0.566. However, last week, XRP showed resilience, rising 2.6%. XRP’s trading volume also decreased from over $1 billion last Wednesday to $827 million in the last 24 hours.
Featured image by Unsplash, chart by TradingView
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