A crypto legal expert is predicting that Ripple’s native token XRP may face a supply shock if the San Francisco-based firm settles its lawsuit with the U.S Securities and Exchange Commission (SEC).
In a new video, lawyer and XRP supporter Jeremy Hogan discusses a scenario in which Ripple is able to settle its legal battle with the SEC and how that turn of events could impact XRP.
“I believe that a settlement agreement would likely include Ripple paying a penalty, but a penalty specifically limited to dates pre-lawsuit. A settlement would likely not include disgorgement of profits to purchasers because of the impossibility of figuring out how to disperse the funds. A settlement could also very well contain a term which includes limitations on the sales of XRP released from escrow.”
Hogan also posits that a settlement would likely include an agreement that would limit the sale of XRP to private sales for companies and clients, shrinking the supply of XRP on the market.
“This would in effect limit or slow the flow of XRP into the marketplace. Sales to section D or corporate purchasers cannot then be put into a public exchange for six months, maybe up to a year. A settlement containing this term would essentially bottleneck the flow of XRP into the market for years to come.”
The attorney notes that should Ripple secure a settlement with the SEC, this would make them the first crypto firm to be fully approved by regulators.
“The settlement would put XRP in the clear as far as securities violations and such. Ripple would be the first crypto company to be 100% in the clear from the SEC.”
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Featured Image: Shutterstock/Harry Costello
