Ripple CEO Brad Garlinghouse suggested that forthcoming quarterly financial disclosures could deviate from the norm. That follows the US Securities and Exchange Commission’s (SEC) utilization of the firm’s disclosures in a recent lawsuit. However, John Deaton, legal counsel to XRP holders, maintains that Ripple’s open communication policy may have averted further allegations of fraud and manipulation.
Voluntary Disclosures: Catalyst for Change
Historically, Ripple took the initiative to release quarterly reports on its XRP holdings as a pledge of transparency. Nevertheless, Garlinghouse revealed that these same reports played a role in the SEC’s legal action, hinting at future changes in their structure.
Released on July 31, the Q2 2023 XRP markets report deviated significantly from previous editions. It primarily addressed the groundbreaking court ruling and attempted to dispel related misconceptions. Additionally, it offered a comprehensive view of the company’s XRP holdings.
The much-awaited court verdict ruled in favor of Ripple. Judge Analise Torres confirmed that XRP is not a security, putting to rest a three-year legal battle between Ripple Labs and the SEC. This decision signifies a milestone in the history of crypto industry jurisprudence.
Dispelling XRP Misconceptions: Ripple Clears the Air
The Q2 2023 report also aimed to clarify several misconceptions following the court’s decision. Ripple underlined that this victory resonates beyond the firm, echoing throughout the broader crypto industry. Moreover, it countered the misbelief that XRP is partly a security token. As per Judge Torres’ ruling, the asset, in and of itself, is not a security.
Contrary to popular belief, Ripple stressed that the court’s decision protected institutional buyers and retail traders. Ripple’s report argued that the decision mainly curbed the SEC’s overreach and that the regulator’s actions to protect investors ultimately caused harm.
As stated in the report, the SEC’s lawsuit in 2020 incited panic selling, causing a sharp dip in XRP’s market value. The market capitalization loss, reaching $15 billion, was predominantly borne by US investors.
Ripple’s XRP holdings rose at the end of Q2 2023 (June 30), reaching 5,551,119,094, up from 5,506,585918 on March 31. The XRP on ledger escrow also decreased from 42,800,000,013 at the end of Q1 2023 to 41,900,000,005 in Q2 2023.
Ripple’s Transparency: A Shield Against Further Charges
Despite potential changes in reporting, John Deaton insists that Ripple’s transparency may have shielded the company from further charges of fraud and manipulation. He stressed that Ripple’s commitment to publishing quarterly reports, while not legally necessary, set the company apart from others that concealed token sales and obscured transactions.
Deaton said the SEC might have charged Ripple with fraud, misrepresentation, or manipulation had there been a chance. He concluded, “Transparency thwarts accusations of fraud, even when critics are keen to make them.”
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