Ripple v. SEC: Will the XRP litigants find a settlement after all?

Parallel to the ongoing legal proceedings of the US Securities and Exchange Commission against Ripple (XRP), there is speculation that the two sides are working towards a settlement. What is the truth of this theory and what is the situation regarding XRP?

Slowly but surely, the conflict between Ripple (XRP) and the US Securities and Exchange Commission (SEC) is coming to a head again: In the second round of the court proceedings, the SEC formulated its demands at the end of March, and they are quite something with USD 2 billion in penalties and compensation payments. Ripple now has until April 22 to respond. Meanwhile, a post is circulating in the XRP community, in which arguments are presented as to why an out-of-court settlement could be in the air.

According to expert Ashley Prosper, the SEC has realized that it will have to prove financial losses of institutional XRP investors in court – but that it will not be able to do so. In fact, the price development of XRP plays into Ripple’s hands here, as does the fact that the XRP sales in question were largely made to institutional investors outside the US. As a reminder: Last summer, a US court ruled in favor of Ripple that XRP in the hands of private investors does not fall under SEC regulation. The status of XRP that Ripple sold to institutional investors is to be decided in the second round of the proceedings, which is now underway.

Prosper continues: The SEC is currently focusing on taking action against Ethereum (ETH) and also has Uniswap (UNI) in its sights. The SEC does not want to risk another setback because of XRP and Ripple, this argument resonates. However, Prosper had to correct itself on what is probably its most important point, namely that the SEC and Ripple had already agreed on a conciliation meeting.

Prosper claims to have identified Ripple’s willingness to compromise because the crypto company is preparing its own stablecoin and the US policy for stablecoins is currently defining the legal framework. An ongoing court case could potentially block Ripple’s plans.

Conclusion: Peace agreement between the SEC and Ripple – rather unlikely

Neither the SEC nor Ripple have shown any interest in reaching a settlement in the legal tug-of-war over XRP over the past three and a half years. In addition, none of the lawyers observing the process are commenting on Prosper’s theses – although well-known figures such as John Deaton and Jeremy Hogan usually like to think out loud a lot. As a result, the speculation is likely to remain little more than a mind game and investors must be prepared for the price curve of XRP to continue to be influenced by considerable litigation risks.

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