Prominent crypto researcher SMQKE suggests that the conclusion of the Ripple lawsuit could unlock the next phase of financial infrastructure.
SMQKE made the assertion based on a legal report titled ‘SHAQ, RIPPLE, AND THE FUTURE OF CRYPTO REGULATION.’ Famous American lawyer James C. Spindler published this report for William & Mary Law School.
A New Blueprint for Financial Institutions
Referencing the report, SMQKE suggested that a complete victory for Ripple in the lawsuit would effectively provide a blueprint for financial institutions, including banks and asset managers, to migrate core financial infrastructures onto blockchain rails.
The researcher noted that Judge Analisa Torres held that a part of Ripple’s XRP sales, particularly its programmatic sales and other distributions, did not violate securities laws. However, legal experts suggested that Ripple’s initial distribution of XRP reflects the sale of a component of future corporate value.
Notably, SMQKE stated that a conclusive ruling favoring Ripple would validate the assertions of these legal scholars, essentially providing a blueprint for financial institutions. The commentator speculated that this blueprint would allow companies to raise funds and move money without subjecting themselves to regulatory hassles.
Rebuilding the Financial System
In addition, SMQKE indicated that a favorable ruling validating Ripple’s sales as a component of future corporate value would showcase ways to rebuild the global financial system from the back end.
This is crucial, especially as financial activities like custody, settlement, trades, and payments increasingly migrate to the blockchain.
With a judicially approved template, market participants can tokenize shares instantly, while payment networks can connect with blockchain wallets without stress. The commentator indicated that banks and custody providers could also automate their operations using smart contracts.
Further, SMQKE emphasized that Ripple’s victory in the SEC case will not only support the company’s ambition but also serve as a green light for the entire financial industry. Therefore, financial institutions can follow Ripple’s court-approved playbook to launch tokenized offerings, manage capital, build custody solutions, and facilitate payments.
Current Status of Ripple Lawsuit
Although Ripple and the SEC have agreed to settle the multi-year legal tussle, Judge Analisa Torres denied their joint motion for an indicative ruling on the agreement.
The agreement centers around Ripple paying $50 million as a fine for violating the law through its institutional sales of XRP instead of the court’s $125 million order.
Additionally, the parties agreed to dismiss the permanent injunction imposed on Ripple’s future institutional sales. However, Judge Torres denied the motion for an indicative ruling, noting that the request had a procedural flaw.
The parties will make another attempt to convince the judge to approve their settlement agreement. However, it remains unclear when this will happen.
