SEC Urges Ripple to Sell $2 Billion Worth of XRP, Legal Expert Raises Concerns about Potential XRP Price Plummet
Legal expert Jeremy Hogan recently voiced his criticism of the SEC’s aggressive pursuit of a staggering $2 billion penalty against Ripple in their ongoing legal dispute. Hogan warns that if Ripple is compelled to comply with this penalty, it would likely be forced to sell a substantial amount of XRP, potentially causing a further decline in the coin’s value. According to Hogan, this outcome would negatively impact retail investors, which contradicts the SEC’s purported goal of safeguarding investors.
Hogan specifically takes issue with the SEC’s request for final judgment, which seeks a significant fine against Ripple for alleged violations of federal securities laws through its institutional sales. He argues that if the court grants the SEC’s plea, Ripple would be obliged to sell large quantities of XRP from its holdings. This, in turn, would result in a substantial drop in XRP’s price, adversely affecting retail investors.
The underperformance of XRP in recent months, despite the legal situation becoming clearer, has raised concerns among investors. Many attribute this lackluster performance to alleged price suppression caused by Ripple’s monthly sales of XRP. While Ripple regularly releases 1 billion XRP from its escrow accounts each month, concrete evidence linking these sales to underperformance remains elusive.
In the midst of this tumultuous situation, Vandell Aljarrah, co-founder of Black Swan Capitalist, advises XRP holders to disregard suggestions of selling their holdings despite the coin’s poor performance. Aljarrah disagrees with Joshua Jake’s advice on the Discover Crypto channel, which encourages XRP holders to sell their tokens. Jake’s recommendation stems from XRP’s recent performance compared to other alternative coins, suggesting that investors consider alternative assets to maximize gains in the current market cycle. However, XRP has seen minimal growth in comparison to its competitors, with only a 5.29% increase over the past 90 days, significantly lower than the double-digit gains experienced by other altcoins during the same period.
Looking ahead, if the court sides with the SEC and imposes the $2 billion fine on Ripple, the company may need to sell approximately 3.22 billion XRP coins at the current market price of $0.62 per coin to raise the necessary funds. However, Ripple could potentially utilize its reported $1 billion cash reserves, disclosed by CEO Brad Garlinghouse earlier this year, to cover the penalty. This could help mitigate the immediate impact on XRP’s market dynamics.
Tags: Ripple (XRP)