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David Schwartz Says Ripple Must Obey the Law Despite SEC Accepting to Lift Institutional XRP Sales Injunction
March 26, 2025
David Schwartz
Ripple CTO David Schwartz downplays the significance of the SEC lifting the permanent injunction on the company’s XRP sales to institutional clients.
The agreement’s terms relating to Ripple’s decision to dismiss its cross-appeal against the SEC have elicited discussions among XRP enthusiasts. As reported earlier, Ripple agreed to drop the case for a reduced fine of $50 million instead of the original $125 million order.
The agreement also requires the SEC to ask the court to lift the permanent injunction imposed on the company’s XRP sales to institutions. In the meantime, the agreement still requires SEC commissioners’ votes and the court’s approval to become official.
Speculation Regarding Injunction Lifting
Nonetheless, the development has triggered speculation, with some crypto enthusiasts suggesting that Ripple will be allowed to sell XRP to institutions when the SEC lifts the permanent injunction.
Specifically, popular XRP community figure WrathofKhaneman speculated that the move would eliminate Ripple’s institutional XRP sales restrictions.
However, the user believes Ripple must conform to federal securities laws to sell XRP directly to hedge funds and private equity firms instead of going through the OTC desk first.
Ripple CTO Reacts
Reacting, Schwartz downplayed the significance of lifting the injunction, noting that its dismissal does not change the company’s legal obligations.
According to him, Ripple must obey the law, including those outlined in Judge Analisa Torres’ ruling, irrespective of whether the injunction still exists.
He characterized the potential lifting of the injunction as one element within a series of changes the current SEC leadership has introduced that could have a ‘massive net effect.’
It is common knowledge that the current SEC leadership has been rolling out significant changes within the crypto market. This includes changing its enforcement-driven approach and taking steps to establish clear rules for the industry.
The SEC recently called for public comment, asking industry stakeholders to suggest how it can create clear crypto taxonomy rules. Ripple responded by proposing three solutions, including urging the regulator to return to its first principle of regulating only securities and staying within its regulatory bounds.
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