Last updated on August 8, 2023
Ripple CEO Brad Garlinghouse has indicated that the company’s quarterly financial reports may be adjusted in the future due to the way the US Securities and Exchange Commission (SEC) used the company’s disclosures against it in their lawsuit. Ripple had voluntarily started releasing these reports as a measure of transparency but found that they were used against them in the legal proceedings. Garlinghouse expressed a continuing commitment to transparency but hinted at potential changes to the format of the reports going forward.
In the meantime, John Deaton, a lawyer representing XRP holders, believes that Ripple’s transparency actually helped the company avoid fraud and manipulation allegations. Deaton stated that Ripple published its quarterly reports despite not being under any obligation to do so, while other companies concealed token sales and disguised transactions. According to Deaton, the SEC would have included fraud, misrepresentation, or manipulation charges in the lawsuit if there was any evidence of such behavior. He emphasized that being transparent prevents such claims, even if the regulatory agency may have been inclined to make them.
Ripple recently released its quarterly XRP markets report for Q2 2023, which focused on the court ruling that declared XRP is not a security. The report aimed to dispel misconceptions surrounding the ruling and clarified that it was not only a victory for Ripple but for the broader crypto industry. The report also addressed the misconception that the ruling only protected institutional buyers and explained that it actually centered on the SEC’s jurisdiction and contradicted their claims of protecting investors. The report further noted that the SEC’s lawsuit in 2020 caused panic selling among investors, resulting in a $15 billion loss in market capitalization for US holders.
Regarding Ripple’s XRP holdings, the report revealed an increase in holdings from the end of Q1 to the end of Q2, while the total XRP on ledger escrow decreased during the same period.
It is evident that Ripple’s transparency in reporting its XRP holdings has played a significant role in their legal battle and may continue to shape their future reporting practices.
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