Rumors doing the rounds regarding a possible settlement by the SEC is creating the oscillation of XRP price reaching $0.5049, to go south almost immediately. Previously too, the price lowered by 0.27%, from the figure of 3.50%, finally standing at $0.4892, following a further decline by 1.77%.
Investors are awaiting the SEC’s verdict on Ripple’s notice on supplemental authority.
As per the last filing with regard to the SEC settlement in the case of Terraform Labs, Ripple mentioned its opinion of awarding a penalty amounting to 10 million for breaking the law. In the SEC’s view-point, the illegal act called for a penalty amount of $102.6 million according to their calculations. All of this was related to the unlawful sale of XRP to institutional investors.
The SEC took into account total gross profits to the tune of $873.3 million, towards its $102.6 million penalty amount fixed. Of course, this figure required a certain amount of relaxation as the total profit included non-constitutional sales too.
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As per the case between Morrison vs NAB, the Supreme’s verdict was that the SEC is only responsible for US-oriented sales. In case the major sales involved non-US institutional investors, there was a possibility of the penalty amount being lowered further.
Over and above all of that, as per the Supreme Court’s verdict, Ripple’s convincing that the post complaint regarding XRP selling was to non-institutional investors, will need to be seriously considered.
With rumors surrounding the possibility of a settlement, two factors require looking into, the initial one being Ripple agreeing to a settlement after all this time, that too for an amount higher than $10 million, and the second, is the reason for the SEC to suggest a settlement for a lot lesser than the $2 billion, sans the provision for a further appeal.
In August last year, the SEC initiated the filing of a motion for interlocutory appeal for challenging the programmatic selling of XRP. Earlier, Judge Analisa Torres had passed a verdict stating that programmatic selling of XRP did not come under the third factor related to the Howey Test.
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Following that, the SEC has accelerated the SEC vs Ripple case and discontinued the charges leveled against the CEO of Ripple, Brad Garlinghouse, as well as the Co-Founder, Chris Larsen.
