New York, NY – In a recent development, the Securities and Exchange Commission (SEC) has obtained a victory against Ripple, potentially leading to an injunction. However, Attorney Bill Morgan argues that such a ruling would not be able to restrict the usage of the On-Demand Liquidity (ODL) solution by its customers.
Magistrate Sarah Netburn has granted the SEC’s motion to compel, sparking discussions among legal experts about the possibility of implementing an injunction to restrain ODL customers. The SEC had requested Ripple’s financial records pertaining to institutional sales of XRP to assess the necessity of an injunction.
ODL, now rebranded as Ripple Payments, is a user-friendly payment solution that utilizes XRP as a bridge currency for swift and cost-effective cross-border settlements. Following the recent ruling, members of the XRP community expressed concerns about potential restrictions on ODL customers if the court decides on an injunction against Ripple in the final judgment.
Contrary to these concerns, Australian-based lawyer Bill Morgan asserts that ODL customers will not be restrained by any injunction. In a Twitter post, he explains that the sales of XRP by Ripple to ODL customers could be restrained, unless properly registered with the SEC. However, ODL customers can still acquire XRP from secondary markets.
Morgan emphasizes that any potential injunction is unlikely to affect ODL customers who fall outside the SEC’s regulatory jurisdiction. He believes that the primary concern lies in Ripple’s practical and commercial challenges. It remains to be seen whether Ripple has a commercially viable alternative if they are unable to sell XRP directly to US-based ODL customers.
Morgan also points out that the SEC is aware of the difficulties Ripple would face if an injunction is granted. This could place significant pressure on the crypto company to structure its future XRP sales in a legally compliant and commercially viable manner. The issue of Ripple’s XRP sales to US-based ODL customers may also become a central point during the remedies phase and any potential appeal.
As the SEC v. Ripple case progresses, the court is yet to determine whether an injunction will be issued, preventing Ripple from selling XRP to US-based ODL customers unless it registers with the SEC. The recent order only requires Ripple to produce its audited financial records, which will aid the court in assessing the necessity of an injunction.
If Ripple’s request for an extension is granted, the company will have until February 20 to submit its financial documents. These records include audited financial statements from 2022-2023, contracts used to sell XRP to institutional clients after the SEC lawsuit was filed, and information on proceeds generated from selling XRP to institutional clients.
It is important to note that this article serves as informational content and should not be considered financial advice. Any views or opinions expressed are solely those of the author and do not reflect The Crypto Basic’s perspective. Readers are advised to conduct thorough research before making any investment decisions, and The Crypto Basic holds no responsibility for financial losses incurred.