Ripple XRP sales in the U.S. may get banned

YEREVAN ( — Ripple is staring at a possible permanent ban on XRP sales to institutional clients in the United States. This looming threat is part of the firm’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).

For the unversed: The SEC vs. Ripple lawsuit concerns Ripple raising over $1.3 billion through unregistered XRP sales. A recent ruling, however, presents a nuanced view. For institutional sales, XRP is deemed a security. This means it must adhere to U.S. securities laws for these transactions. Conversely, the court ruled that programmatic sales of XRP to retail investors through exchanges are not securities. This is a partial victory for Ripple and the broader crypto market.

Ripple’s Legal Preparations

Attorney Bill Morgan clarifies Ripple’s preparations. He states that the firm is bracing for the worst-case scenario, which includes a potential permanent injunction on XRP sales to U.S. institutional clients.

Ripple’s Backup Plans – Source: Bill Morgan

Ripple’s strategy involves continuing sales through its foreign subsidiaries. These entities operate under different regulatory regimes, allowing Ripple to maintain its business operations internationally. This approach ensures that Ripple can still offer its services and sell XRP outside the United States.

Impact of the FIT21 Bill on Ripple

The Financial Innovation and Technology for the 21st Century Act (FIT21) has stirred debates among XRP holders. This bill, passed by the U.S. House, seeks to provide clear regulatory guidelines for cryptocurrencies.

However, Bill Morgan clarifies that the legislation is not retrospective. The court has already found that XRP itself is not a security, and the SEC will not challenge this finding. Therefore, the new legislation will not change this status.

Legislation and XRP Status – Source: Bill Morgan

Ripple’s arrangements for a worst-case scenario include selling XRP to overseas customers through subsidiaries. These subsidiaries operate under different licensing regimes, ensuring compliance with local regulations.

Ripple’s Strategic Moves Amid XRP Sales Challenge

Ripple’s approach seeks to manage the potential ban on XRP sales in the U.S. The company plans to continue its international sales through subsidiaries, which helps reduce the impact of the SEC’s legal actions.

While the ongoing legal battle with the SEC presents challenges, Ripple’s preparations and strategies reflect its ability to adapt. By focusing on international markets and complying with various regulatory environments, Ripple intends to maintain its operations and market presence.

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