Ripple Faces Private Fundraising Challenge Amid Unlifted Court Injunction: Ex-SEC Lawyer

Ripple and the SEC remain resolute in their efforts to persuade the court to modify its final judgment. Legal experts say the central issue of the joint motion is the dissolution of the injunction on institutional XRP sales, which could have far-reaching consequences for Ripple.

Failure to Lift Injunction May Impact Ripple’s Fundraising Ability

Former SEC attorney Marc Fagel has emphasized the importance of lifting the injunction on Ripple’s institutional XRP sales. He argues that its continued enforcement will negatively impact the company’s ability to raise funds. Fagel shared his view in an X post ahead of a pivotal court decision that could end the Ripple lawsuit.

In 2023, Judge Analisa Torres ruled that Ripple’s previous sales of XRP to institutional investors violated U.S. securities laws. As a result, she imposed a permanent injunction preventing the company from offering XRP to institutional investors unless it complies with securities regulations.

As parties are pushing for a settlement to the case, a joint motion asking the court to dissolve the injunction has been filed. While several issues are in contention, including a reduction of the penalty, Fagel says Ripple’s main concern is the lifting of the injunction.

Fagel says Ripple cannot raise funds via private offerings since a sale to institutional investors will carry additional legal risk.

“The main issue with the injunction is that it limits Ripple’s ability to raise financing in private offerings,” said Fagel.

Institutional Investors Await the Court’s Decision

Pro-XRP lawyer Bill Morgan also weighed in on the issue, underscoring the importance of lifting the injunction for both Ripple and institutional investors. Morgan notes that institutional players are invested in the ruling to gain clarity for future purchases.

“The dissolving of the injunction is still important at least to institutional investors who wish to acquire XRP from Ripple in the US,” said Bill Morgan.

If the judgment remains unmodified, Morgan says it will place Ripple at a significant disadvantage compared to its competitors.

Recently, Ripple and the SEC have filed a status report seeking to delay the appeal proceedings. For now, the chances of the court granting the joint motion hang in the balance.

However, Morgan pointed out the strongest argument in the filing: the court may be more open to modifying its judgment to end the long-running case.