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Despite the legal tussle between the SEC and Ripple, XRP has continued to attract the interest of institutional clients leveraging the coin for cross-border settlements.
Prominent crypto expert Zach Rector has provided new evidence showing significant demand for XRP despite the coin being at the center of a multi-year legal tussle between the U.S. SEC and Ripple.
In a post yesterday, Rector shared an excerpt from the SEC’s opening remedies brief, suggesting that Ripple has entered into 80 institutional sales contracts since the lawsuit was filed in December 2020.
"Ripple was forced to disclose that it has entered into more than 80 Institutional Sales contracts since the filing of this lawsuit."
Who said there wasn't demand for #XRP ???— Zach Rector (@ZachRector7) March 26, 2024
The SEC’s claim underscores the growing interest in XRP among institutional investors, who are poised to engage with Ripple to utilize XRP for cross-border settlements.
Ripple’s Post-Complaint Revenue Spikes
Furthermore, the SEC also noted that Ripple’s XRP sales revenue skyrocketed tremendously from 2021 to 2023, surpassing its total revenue from 2014 to 2020.
However, the exact revenue Ripple generated after the complaint was filed was redacted in accordance with the parties’ sealing request.
Furthermore, the SEC pointed out that Ripple remains the largest XRP holder, with a holding of 45.77 billion units of XRP as of December 31, 2023. The commission argued that Ripple sold massive amounts of XRP in direct On-Demand Liquidity (ODL) transactions between 2021 and 2023.
SEC Seeks $2B Fine From Ripple
The SEC based its argument on the document it compelled Ripple to submit last month. As reported earlier, Ripple was forced to produce its audited financial statement between 2022 and 2023, as well as post-complaint contracts governing institutional sales.
Based on the huge revenue Ripple generated in XRP sales since December 2021, the SEC asked the court to levy a fine of $2 billion against the company.
It also requested that the court impose an injunction permanently prohibiting Ripple from violating federal securities laws through its institutional sales.
How Ripple Addresses Growing Demand for XRP
Meanwhile, there has been a growing demand for XRP among institutional clients. Most institutional clients have utilized the token as a bridge currency between two fiats for instant and cost-effective cross-border settlements.
To meet this growing demand for XRP, Ripple sells a portion of the 1B XRP that is released from escrow monthly. Specifically, the crypto payments company releases 1B XRP coins monthly as a routine procedure.
While 800M XRP are put back in escrow, Ripple retains the remaining 200M coins to meet the growing demand of ODL customers.
Despite selling some of the unlocked XRP to ODL customers, Ripple also buys XRP in the open market. For instance, its Q1 2023 report showed that the company sold 2.93 billion XRP to ODL clients and purchased 2.56 billion XRP in the same quarter.