Ripple’s XRP Distribution Faces Legal Scrutiny Amid Market Volatility


The crypto community has found itself at the heart of a spirited debate over Ripple’s authority to distribute XRP tokens. This controversy was ignited by a recent online skirmish on platform X between XRP advocate Bill Morgan and a crypto analyst operating under the pseudonym “Darkhorse.” The core of the argument hinges on the complex legalities and market repercussions linked to Ripple’s operations with XRP.

Bill Morgan, an unwavering proponent of XRP, firmly contested the idea that Ripple faces any legal barriers in selling its XRP tokens, except when it comes to dealings with institutional investors. Responding to Darkhorse’s reference to a July 2023 decree by Judge Analisa Torres, which allegedly prohibited Ripple’s XRP sales, Morgan clarified that Ripple’s sales should not be considered as investment contracts within the remit of U.S. Securities laws. Morgan underscored that there was no legal impediment to Ripple offloading its XRP holdings. The crux of the issue, as he put it, was whether Ripple is obliged to register its XRP sales and offers with the U.S. Securities and Exchange Commission (SEC).

A new dimension was introduced to the debate by another platform X user, who highlighted the potential transformation of Ripple’s XRP sales into securities transactions in light of Judge Torres’ decision. This reinterpretation arises from the now widely recognized involvement of Ripple with XRP, which could potentially set expectations for value appreciation based on the payment company’s activities. Up until Torres’ ruling, such sales had not been categorized as securities transactions due to the absence of evidence that retail buyers were cognizant of Ripple’s connection to XRP.

Morgan rebuffed this by pointing out that the XRP price trajectory over the past five years fails to support the presumption that Ripple’s actions might predictably result in profits. He went further to suggest that post-July 13th purchasers harboring such profit expectations possibly lacked a ‘reasonable expectation’ or might be misguided.

Amidst this backdrop of heated debate and legal discourse, Ripple executed a sizable transaction, moving 80 million XRP tokens—estimated at around $46.18 million—to an anonymous wallet. This move, flagged by blockchain monitor Whale Alert, has set the XRP community abuzz with conjecture.

The market has observed XRP with keen interest as its value has demonstrated volatility. The cryptocurrency saw its worth retreat by 1.5% within a span of 24 hours, bringing the price down to $0.566. Nonetheless, XRP has exhibited tenacity over the preceding week, recording a 2.6% uplift. Parallel to these price movements, XRP’s trading volume has experienced a downturn, slipping from north of $1 billion the previous Wednesday to $827 million over the last day.

It remains to be seen how the market continues to respond to the ongoing debates and Ripple’s market maneuvers. What is clear is that the intersection of finance and technology continues to present novel legal and economic questions for both the crypto landscape and beyond.


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