Institutional Investors in Panic Mode Following SEC’s Allegations in the Ongoing XRP Lawsuit

In his latest analysis of Ripple, Bill Morgan has raised concerns about potential legal challenges for the company due to its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).

While Morgan’s commentary may be limited and prone to exaggeration, his point about Ripple’s institutional sales practices is worth exploring in relation to the impact on prices and other factors.

Just two days ago, the SEC filed a chart outlining the proposed remedies, with today being the official deadline for public disclosure. Based on historical interviews, it is understood that the SEC is seeking a $7 billion settlement to cover damages and fines.

Following this announcement, Morgan took to Twitter to express his concerns about the SEC’s allegations regarding Ripple’s institutional sales. Specifically, he highlighted the SEC’s claim that Ripple’s heavy discounts caused harm to other institutional investors, resulting in $480 million in losses.

Morgan argues that this statement implies that investors who did not receive discounts could potentially join class-action lawsuits against Ripple, claiming that the non-disclosure of discounts during purchases caused them harm. He emphasizes that a strong argument for causation would be necessary for these thematic lawsuits to proceed.

Additionally, Morgan points out that the SEC’s classification of Ripple’s sales to institutions as investment contracts suggests that the disclosure of discounts should have been made if the sales had been registered. This adds another layer of complexity to the legal proceedings and underscores the importance of transparency in cryptocurrency transactions.

Overall, while Morgan’s analysis may have limitations, it raises valid concerns about the potential legal challenges Ripple may face as a result of its ongoing battle with the SEC. The impact of Ripple’s institutional sales practices on prices and other factors should be carefully considered in light of these developments.