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New Zealand-based XRPL node validator rippleitin.nz (@rippleitinNZ on Twitter) shares his views on the most pessimistic outcome of the Ripple/SEC legal battle.
Once Ripple loses, XRPL tokens will be under fire, community enthusiast says
XRPL node validator who goes by @rippleitinNZ came to Twitter to share his views on the possible influence of the hypothetical anti-Ripple verdict of the U.S. court. Should Ripple fail to protect its position, XRP token, a core asset of the XRP Ledger ecosystem, will be deemed an unregulated security.
If Ripple lose against the SEC, and XRP is deemed to be a security, then surely the majority of tokens on the XRPL, issued by US citizens/companies will also be deemed as securities, as they cannot operate their token without using XRP. @TheReaperCoin where will this leave you?
— rippleitin.nz (@rippleitinNZ) January 10, 2023
This, in turn, could lead to a huge "domino effect." As per the estimation of @rippleitinNZ, the majority of U.S.-headquartered or U.S.-based companies cannot operate their XRPL-based tokens without using XRP.
As such, the lion's share of XRPL-based assets will also be deemed securities. All of their issuers might be sued for operations with unregulated (unregistered) securities or investor fraud.
Also, the teams of the projects will be obliged to activate buyback mechanisms for the assets that have already been released to the free market, @rippleitinNZ says.
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As covered by U.Today previously, Ripple representatives opposed the SEC's motion to seal the documents that were previously submitted in the court proceedings.
Are projects ready to leave XRP Ledger?
Patrick L. Riley, a founder of Reaper Financial, a platform designed to mint, store, trade and exchange NFTs on XRP Ledger, admits that his project might replace XRPL with some other technical platform.
It would be most inconvenient. We would transition to another chain if needed, however we have plenty of legal recourse between now and that potential scenario.
In further discussion, @rippleitinNZ stated that even moving funds from XRPL to another blockchain is impossible without using the XRP asset, which makes the transition difficult.
As U.Today reported previously, Gene Hoffman, CEO at Chia Network (XCH) blockchain, is sure that Ripple will lose its two-year-long battle with the SEC.