Enterprise Blockchain Firm Ripple Releases Q2 2023 XRP Markets Report

Brad Garlinghouse, CEO at Ripple, says that they began sharing detailed reports to voluntarily provide updates of their XRP holdings.

Sadly, however, they were used against them in the US Securities and Exchange Commission SEC lawsuit – however, he added that they remain steadfast in their commitment to transparency but suspect they’re “going to look a bit different moving forward.”

Since early 2017, Ripple has reportedly published “a quarterly report to voluntarily provide regular updates and commentary on a number of topics, including: the state of crypto markets, Ripple’s quarterly XRP sales, announcements regarding the decentralized XRP Ledger and other news from the broader XRP community.”

In this report, Ripple will focus “on the July 13, 2023 landmark court decision in Securities & Exchange Commission v. Ripple Labs Inc., that definitively declared that XRP is not a security.”

This report will aim to debunk several misconceptions they’ve seen out there “about that decision.” The firm will also “share certain metrics regarding Ripple’s XRP holdings from the past quarter.”

While published in a “good faith effort” at transparency, these quarterly reports have been weaponized “against the company by the SEC,” Ripple claims.

“Ironic” for an agency that “touts transparency and disclosure,” Ripple added.

Accordingly, Ripple now says it is “re-evaluating the role and contents of this report going forward and will have updates on that front in Q3 2023.” Rest assured, however, their original intent remains: “to be transparent and raise the bar on transparency for the crypto industry as a whole.”

As noted in a blog post, the SEC’s case against Ripple was “filed in December 2020.”

From the very beginning they said they would “defend the case not only on their own behalf but on behalf of the entire crypto industry in the U.S. and that they would ultimately come out on the right side of the law.”

Over two and a half years later, Ripple, Chris Larsen, and Brad Garlinghouse “have been vindicated.”

On July 13 the Court “unequivocally ruled that XRP, in and of itself, is not a security.”

XRP, along with BTC, are now “the only two digital assets in the U.S. with that clarity although the Court’s decision sets a key precedent that other market participants can rely on.”

As mentioned in the update, the SEC’s “misguided campaign” of regulation by enforcement has been “exposed for what it is — a strategy of intimidation and misinformation in furtherance of its own quest for political power.”

Mr. Gensler’s oft repeated statement “that all crypto tokens except Bitcoin are securities subject to the SEC’s jurisdiction has now been firmly debunked.”

Not only has the Court spoken, but “the market has spoken as well.”

Shortly after the decision was issued, several cryptocurrency exchanges, “like Coinbase, Kraken and Bitstamp made XRP available for trading on their U.S. platforms and XRP was amongst the top three digital assets (by trading volumes).”

To summarize, here are the main takeaways from the Court’s ruling:

  • XRP is not in and of itself a security
  • Ripple’s sales of XRP on exchanges – not securities
  • Ripple’s sales of XRP by executives – not securities
  • A wide range of other Ripple’s XRP distributions – to developers, to charities, to employees – not securities
  • Certain Ripple sales pursuant to written contracts were investment contracts and therefore securities (more on this later).

Misconceptions About The Ruling

Ripple says they have seen “a number of misconceptions out there following the decision and wanted to set the record straight.”

Misconception 1: The decision is a split decision

As clarified in the update:

“This case has always been about getting clarity about the regulatory status of XRP in the U.S. Ripple has stated since day one that XRP is not a security and the Court vindicated that position. In so doing, the Court also laid the groundwork for others to determine that other tokens, in and of themselves, are not securities. The decision is a resounding win for Ripple and the industry more broadly.”

Misconception 2: The decision says that XRP is a security in some settings and not in others

As mentioned in a blog post:

“Not so. XRP itself is never a security. As the Court said, “XRP, as a digital token, is not in and of itself … an investment contract” and thus, not a security. While XRP (just like an orange grove or a gold bar) – when coupled with promises can be sold as an investment contract – the XRP (or the orange grove or the gold bar) itself does not magically transform into a security in those situations.”

As explained by the firm:

“Whether or not something is an “investment contract” requires an analysis of each transaction to determine whether an investment of money was made in a common enterprise and the buyer is led to expect profits based on the efforts of the seller or a third party. Take the orange grove example (from the seminal Supreme Court Howey case). Alone, an orange grove is not a security, but it is possible to bundle the orange grove with other promises, rights and obligations in a sale for money and that entire bundle forms the investment contract. But even then, the orange grove is still an orange grove.”

The statement that the same “thing” can be sold to buyer “A” as part of a simple buy/sell transaction and also sold to buyer “B” as part of an investment contract is a non-controversial statement of the law.

What finds no basis in the law is “the SEC’s propaganda to the contrary.”

To view the other misconceptions, according to Ripple, check here.

Ripple’s XRP Holdings

Lastly, as they indicated, this quarter they are sharing information “about the XRP that Ripple holds (as of March 31, 2023 and June 30, 2023).”

The XRP that Ripple has falls “into two categories: XRP that it currently has available in its wallets, and XRP that is subject to on-ledger escrow lockups that will be released each month over the next 42 months. For this latter category,”

Ripple does not “have access to that XRP until the escrow releases to Ripple on a monthly basis. The vast majority of the XRP released is put back into the escrow.”

March 31, 2023

  • TOTAL XRP HELD BY RIPPLE: 5,506,585,918

June 30, 2023

  • TOTAL XRP HELD BY RIPPLE: 5,551,119,094

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