In a recent legal document submitted to the SEC, Ripple announced some adjustments to their services in the US market. The filing states that instead of using XRP as the intermediary currency, Ripple now utilizes Tether’s USDT for its On-Demand Liquidity (ODL) solution catering to American clients.
Ripple Uses USDT for ODL in the US
Last year’s court ruling led Ripple to change its currency for institutional sales from XRP to USDT. The judgment found that the sale of XRP tokens to institutions in the US was against securities laws. In response, Ripple began using non-US entities as contract partners for selling XRP to ODL customers. Additionally, all US ODL clients now utilize a different currency instead of XRP for their transactions.
An influential XRP supporter, Crypto Eri, also shared new information regarding X through a post. The content of her post includes what appears to be an internal memo from Ripple’s President Monica Long. In the memo, Long explains Ripple’s decision to shift from USDT (Tether) to XRP.
After receiving the Order, we promptly shifted every US-based ODL customer from utilizing XRP as the intermediary currency in ODL to using USDT (or an alternative approved stablecoin). It is recommended that USDT (or BTC or other verified stablecoins) be used for all US transactions, unless explicitly authorized by Legal.
Ripple’s decision to make this modification signifies their commitment to offering ODL services to US customers in accordance with legal requirements. According to Long’s communication, the non-US entities facilitating these transactions are based in Singapore. Ripple’s president emphasized that these foreign entities serve as the main contracting parties for selling XRP contracts to new ODL customers, who largely reside outside of the US.
Long’s policy, effective in 2023, mandates a minimum XRP holding for Ripple’s On-Demand Liquidity (ODL) clients. As per Crypto Eri’s representation, this requirement applies to all ODL customers and their corporate entities, except for those deemed “otherwise sophisticated,” at Ripple’s discretion. The regulation aims to ensure that ODL users maintain substantial reserves to sustain their business activities and safeguard their end-users.
XRP Sales May Affect Ripple’s Revenue
According to Ripple’s filing, the sale of XRP is crucial to the company’s financial health. Anthony Bracco, Ripple’s accounting expert, stated in the document that without including XRP sales revenue, Ripple incurred a loss from April 1, 2014, to December 22, 2020.
Recently, Ripple challenged the SEC’s demand for a $2 billion penalty by filing a motion. The company believes the fine should not exceed $10 million. In their filing, Rippe expresses readiness to follow regulations in the future. However, they consider the SEC’s demands as excessive and unjustified, lacking legal foundation or principle. Ripple requests the court to dismiss the request.
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2024-04-24 14:03