Legal Expert Explains Why XRP Price is So Low in Light of New SEC Public Filing

A legal commentary from U.S.-based attorney Fred Rispoli asserts that the discounted sales from Ripple to institutional buyers could be the reason behind the low price of XRP.

Rispoli made these remarks while speaking on the latest development surrounding the long-standing Ripple vs. SEC lawsuit. For context, the U.S. SEC recently filed its motion seeking a remedies package from Ripple for its breach of securities laws with regard to XRP sales to institutional investors.

SEC Seeks $2 Billion from Ripple

The securities regulator is asking the court to impose a $2 billion fine on Ripple as a remedy for this breach, a figure that Ripple’s executives, including CEO Brad Garlinghouse and Chairman Chris Larsen, have dismissed as outrageous.

Now, with Ripple expected to file its reply brief to the SEC’s motion next month, details from the publicly available redacted version of the regulator’s motion have triggered some talking points, including discussions on Ripple’s discounted sales of XRP to some institutional buyers.

Recall that The Crypto Basic confirmed that Ripple leveraged bots for its past sales to institutions. The SEC revealed in its latest motion that the firm displayed favoritism in these sales, allowing some institutions to procure XRP at much lower prices. 

According to the SEC, Ripple failed to sufficiently disclose information regarding these discounted sales, allowing some investors to procure XRP at higher prices while others bought the token at much lower prices. The SEC claims Ripple could have been more transparent about this price discrepancy if it registered its sales.

XRP Low Price Could be Due to Ripple’s Discounted Sales

This was the agency’s attempt to prove that Ripple’s sales actually harmed investors, particularly those who got the assets at high prices. Speaking on the latest discovery, Rispoli asserted that these discounted sales to some institutions could be the reason behind XRP’s low price. 

…have already said the SEC's motion is full of mischaracterizations. Let's hope that is correct because the picture painted is not a good look for Ripple and lends credence to the $XRP haters on why the price is so low. Namely, the deep discounts by Ripple on XRP sales. 3/10

— Fred Rispoli (@freddyriz) March 26, 2024

The legal expert’s remark suggests that if the discounts were large enough, some of these institutions who procured XRP at extremely low prices could be responsible for large dumps impacting XRP price movements when it looks to secure a bullish momentum.

He expressed concern about Ripple’s actions, which may negatively affect the company’s reputation and the price of XRP. Rispoli hopes that the situation is not as bad as it seems but acknowledges that Ripple’s selling of XRP at discounted prices may be one reason why the XRP price remains low.

Notably, these institutions could be looking to take profit on any rally that XRP engineers, further compounding selling pressure. According to Rispoli, if this is the case, then retail investors who continue to hold onto their bags anticipating a substantial price increase are serving as exit liquidity.

Nonetheless, nothing is certain as of press time, as Ripple is expected to file a brief reply and make sense of the situation. Meanwhile, further details from the SEC’s motion suggest that Ripple persisted in its XRP sales in the period after the agency filed its complaint and after the summary judgment.

However, despite Ripple’s continuous sales of XRP, the firm has contended that its post-lawsuit sales, especially ODL-related ones, took a different nature from the previous sales to institutions. Rispoli says the firm would need to sufficiently prove this position.