Soon to be two and a half years old, the multibillion-dollar lawsuit between Ripple (XRP) and the U.S. Securities and Exchange Commission (SEC) is dragging on. Could Ripple be proactive in destroying XRP reserves to make the SEC look kind?
In the long wait for a ruling in the US Securities and Exchange Commission’s (SEC) case against Ripple (XRP), an unconventional suggestion of how the process could be shortened is currently circulating.
Thus, US media report that the idea has emerged that Ripple should voluntarily liquidate its entire reserves in XRP and destroy the tokens. After all, Ripple still holds 42 billion XRP itself, which would currently have a theoretical market value of about $20 billion and represent 42 percent of the total holdings of all XRP. In the SEC vs. LBRY case, which has parallels to the Ripple lawsuit, the regulator is demanding the destruction of LBRY’s reserves.
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There has been no comment from Ripple’s leadership on the scenario of proactively destroying XRP
Ripple’s huge reserves have been criticized among investors for years because of fears of them influencing the price curve. For Ripple, a rule is recorded not to sell more than a billion XRP monthly. To irrevocably remove 42 billion XRP from the market in one step would therefore require broad consensus among network participants, which seems unrealistic.
Thus, eyes continue to turn to Judge Analisa Torres, who will rule on SEC v. Ripple in New York. Her ruling is expected by the end of June, and the evidentiary hearing has been completed. Her latest interim ruling orders that the background of the infamous “Hinman Speech” will not remain under seal. This speech is central to Ripple’s strategy to prove that XRP, like Ethereum (ETH), does not qualify as a security and thus does not fall under SEC oversight. Legal process observers such as Jeremy Hogan and John Deaton assessed Judge Torres’ new ruling on Twitter as positive for Ripple.
Bottom line: is an XRP comeback approaching?
There has long been a broad consensus in the crypto scene that the outcome of the SEC case will not only have an impact on Ripple and XRP but will carry a signal character for the regulation of cryptocurrencies in the US.
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First published in BLOCK-BUILDERS.DE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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