In a strategic move anticipating its re-entry into the US market, Ripple has undergone significant changes in its approach to XRP sales strategy to institutions, as disclosed in its latest quarterly report for Q4 2023. This adaptation follows a crucial court ruling on July 13, 2023, affirming that XRP is not a security. However, certain past sales were flagged for violating securities provisions, prompting Ripple to revamp its XRP sales strategy even before the court’s decision.
XRP Sales Strategy Shift: Before the Trial
The Q4 report sheds light on Ripple’s altered approach to selling XRP to institutions, pre-dating the court’s ruling. Previously, Ripple directly sold XRP to institutional buyers under written contracts, amounting to $729 million. This arrangement was deemed an investment contract by the court, with buyers anticipating Ripple to enhance XRP’s price, leading to profit generation.
Impact of Changed Model on XRP’s Dynamics
Under the revised sales model, purchasers of XRP now acquire the cryptocurrency solely to facilitate quick and low-cost transactions, holding the asset for only a brief period. This shift suggests that recent or ongoing sales to institutions may not be subject to the same securities provisions as past transactions. This adjustment in Ripple’s XRP sales strategy could potentially mitigate regulatory penalties or sales bans, allowing Ripple to continue its operations seamlessly.
Regulatory Response and SEC Lawsuit Developments
In response to the ongoing SEC lawsuit, Ripple is taking measures to ensure that its XRP sales align with legal standards. The SEC had previously requested Ripple’s financial records to determine a possible injunction, which could restrict future XRP sales. Concerns within the XRP community arose about potential restrictions on On-Demand Liquidity (ODL) customers if an injunction is issued. However, Attorney Bill Morgan reassured ODL clients that alternative sources for XRP would be available.
As the case transitions into the remedies phase, both the SEC and Ripple are set to submit remedies-related briefs from March to April 2024. The court will ultimately decide on appropriate remedies for Ripple’s violations of securities laws. This critical juncture prompts a closer examination of Ripple’s adaptability and the potential implications for XRP’s standing in the evolving cryptocurrency market.
Navigating Regulatory Challenges
Ripple’s proactive adaptation to regulatory changes underscores its commitment to compliance and market stability. The evolving landscape will be closely monitored as the court proceedings progress, determining the impact on Ripple’s operations and the broader implications for XRP’s role in the cryptocurrency ecosystem.
Current XRP Market Status
Currently XRP experienced a 1.05% surge reaching current price of $0.5213 and 1.14% surge in trading volume over the past 24 hours.
Also See: Ripple Revives! XRP to Trade in the US Again
