Latest XRP Lawsuit Development: SEC Allegations Spark Institutional Investors’ Panic

In his recent analysis of X, Bill Morgan brought attention to the potential legal challenges that Ripple may face as a result of its ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).

Although Morgan’s commentary lacks comprehensive information and tends to be sensationalized, it is worth discussing Ripple’s project and its impact on prices and other factors in relation to the company’s institutional sales practices.

Two days ago, the SEC filed a chart related to remedies, and today marks the official date for public disclosure. Based on the historical interview, we can gather that the SEC is seeking a $7 billion amount as damages and fines.

Following this statement, Bill Morgan expressed his concerns on Twitter regarding the SEC’s allegations against Ripple’s institutional sales. Morgan specifically highlights the SEC’s claim that Ripple’s heavy discounts have harmed other institutional investors, resulting in $480 million in losses for these institutions.

The SEC argues that the discounted sales to certain institutional investors have exerted downward pressure on the market price of XRP. These assertions in the SEC brief, along with the evidence supporting them, require further examination on my part.

Morgan suggests that this statement implies that all other investors who did not receive discounts could potentially become plaintiffs in class-action lawsuits against Ripple. Many thematic lawsuits could be filed by institutions claiming that the lack of disclosure regarding the discounts during the purchase has caused them harm. According to the author, a strong argument regarding timing would be necessary for these lawsuits to demonstrate causation.

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 emphasizes the importance of transparency in cryptocurrency transactions.

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