Ripple Faces Potential $3 Billion Loss
In a series of recent events related to Ripple's lawsuit with the SEC, cryptocurrency expert Zach Rector has revealed a shocking scenario that could lead the company to pay billions of dollars in fines to the U.S. Securities and Exchange Commission (SEC).
Ripple's $3 Billion Potential Loss
The renowned financial expert shared his analysis of the Ripple vs. SEC legal dispute on YouTube on Monday.
He claimed that the payment company might have to pay over $3 billion in fines to the SEC for violating federal securities laws by selling XRP.
According to the expert, the "worst-case scenario for the company is if Torres deems XRP ODL to be an investment contract." This would lead the company to pay a fine of "3 to 3.5 billion USD" to the SEC.
He pointed out that the regulatory body asserts that since suing the company in December 2020, Ripple has sold about $3 billion worth of XRP.
Additionally, the SEC also argued that when the lawsuit began, the company sold unregistered securities in 2013 to raise $1.3 billion.
However, after Judge Analisa Torres ruled that Ripple's programmatic sales activities and other XRP distribution activities did not operate as unregistered securities, this amount significantly reduced to $777 million.
The expert specifically predicted that Ripple would appeal in the second round if Judge Torres ruled that selling ODL was an investment contract.
He claimed that the company needs confirmation from its lawyers that the sales volume related to ODL can never be considered securities.
He also asserted that customers buying XRP to get ODL do not expect to profit from the payment company's efforts.
Therefore, he speculated that if Torres ruled that XRP sales connected to ODL are securities, Ripple would have to appeal this decision.
In the YouTube video, the expert addressed claims that Ripple would never be able to sell XRP again if they ultimately have to pay fines.
He claimed that this belief is "inaccurate" because the company can still perform all aspects of selling XRP.