Why is the XRP Price So Low? Legal Expert Breaks Down SEC Filing Impact

• A legal expert has shared new insight into the $2 billion fine from SEC and XRP price impact.
• The expert noted that the discounted sales of XRP to institutional investors mark the basis for this hefty fine demand.

Fred Rispoli, an attorney based in the U.S. has outlined in a series of posts on X the reasons behind XRP’s low price. Furthermore, he made a breakdown of the impact of the recent filing by the Securities and Exchange Commission (SEC).

The SEC’s Allegations and Impact on XRP Price

In his post, Ripoli claims that the low XRP price is due to huge discounts on XRP sales offered by Ripple Labs Inc. to institutional buyers. Rispoli’s comments follow the SEC’s motion seeking remedies against Ripple for allegedly violating securities laws in the sale of XRP to this class of investors. 

The SEC recently filed a motion that includes a request for a $2 billion fine against Ripple,  following reports from Crypto News Flash. This action has sparked debate in the crypto industry, with Ripple officials criticizing the proposed penalty as excessive.

The SEC’s motion makes clear, among other things, that Ripple sold XRP to institutional customers with apparent bias, allowing some investors to purchase the cryptocurrency for much less than others. According to the SEC, investors have suffered as a result of Ripple’s inadequate disclosure of these discounted sales, which may have affected the market price of XRP.

On p.18, numbers are redacted but if discounts are wide enough, then Institutional Buyers (like GSR) scored unbelievable discounts and have bags-upon-bags of XRP that they could continually sell at astronomical profit. If accurate, retail buyers continue to be the liquidity. 4/10

— Fred Rispoli (@freddyriz) March 26, 2024

Rispoli asserts that if these discounts were substantial enough, institutional buyers who bought XRP at cheaper levels could have to liquidate their holdings when bullish momentum is trying to build, which would drive the price of the cryptocurrency lower. This observation raises concerns regarding Ripple’s actions and its potential influence on both the company’s reputation and the XRP market.

The legal expert went on to express hope that the situation is not as severe as it appears but concedes that Ripple’s sale of XRP at discounted pricing could be one of the reasons why the XRP price remains low.

Ripple’s Post-Lawsuit Sales

Despite legal objections from the SEC, Ripple allegedly continued to sell XRP, albeit with apparently new motives, particularly in the field of On-Demand Liquidity (ODL). Rispoli emphasized the need for Ripple to back up these assertions to differentiate its post-lawsuit sales from earlier practices.

As Ripple prepares to file its response brief to the SEC’s motion, the crypto space anticipates additional information about the company’s defense and efforts to resolve concerns about its sales tactics. However, the eventual resolution of this legal issue is unknown, leaving both investors and industry analysts eagerly watching developments in the case.

As of the latest data from MarketCap, XRP is trading at $0.6324, down by 1.3% in 24 hours with a trading volume of $2.2 billion, and its market capitalization pegged at $35 billion. Recalling Crypto News Flash’s earlier disclosure, crypto analyst Egrag Crypto has revealed insights into XRP’s future trajectory, implying that the cryptocurrency is on the verge of a huge rise. 

The analyst drew parallels with the 2017 market cycle to highlight indicators that XRP could be poised for a bullish breakout.