Court filings submitted by Ripple on May 29, 2024, indicate that its current XRP sales related to On-Demand Liquidity (ODL) do not involve over-the-counter (OTC) style discounts for sophisticated counterparties. This move aims to address recurring questions about XRP discounts within the SEC case. While the record confirms Ripple's statements regarding XRP sales discounts, it does not directly support claims made by Ripple CTO David Schwartz emphasizing this point with his "bad logic" critique.
Key Takeaways
Ripple's filing clearly distinguishes current ODL sales from past institutional contracts.
The key document is Ripple's Reply Memorandum (ECF No. 968) filed on May 29, 2024, during the remedies phase. In it, Ripple states that its current XRP sales for ODL do not include OTC contract features associated with earlier institutional transactions, including discounts offered to sophisticated counterparties.
The filing also notes that Ripple no longer sells XRP through OTC transactions that have the characteristics of institutional sales as determined by the court. This is crucial as Ripple is not only contesting past findings but also arguing that its current sales model differs significantly from the one scrutinized in the SEC case.
The filing appears within Ripple's motion regarding sealed materials for the remedies phase. Ripple argues that even if the company's current sales structure has changed, historical contract terms remain commercially sensitive.
Analysis of Filing Data
The issue of discounts is significant because Judge Torres focused on how XRP was sold.
The broader legal context of the case has been established. Judge Analisa Torres previously ruled that Ripple's institutional XRP sales violated securities laws, but XRP itself was not deemed a security in its abstract form.
This distinction places the transaction structure at the heart of the case. Ripple's current argument aims to demonstrate that the sales mechanisms now associated with ODL are different from the earlier OTC arrangements that led to liability risks.
The absence of discounts is critical because discounts can suggest negotiated institutional deals rather than a more standardized, product-related distribution model. By stating these terms are absent in current ODL sales, Ripple seeks to emphasize that the relevant conduct belongs to an earlier phase.
The filing does not erase the court's prior ruling. However, it does provide Ripple with a basis to argue during the remedies phase that any penalties or injunctive relief should be tailored based on past conduct, rather than assuming it describes current XRP sales practices.
Therefore, the statement about the absence of discounts should be viewed as a narrow legal structuring argument, not a comprehensive statement about XRP market dynamics. The filing pertains to contract terms and transaction design, not a complete theory of XRP price action.
The strongest verified statement is limited: Ripple's May 29, 2024 filing states that current XRP sales for ODL do not utilize OTC-style discount terms associated with earlier institutional sales.