Ripple Vs SEC Legal Feud: XRP Buyback Role Questioned

Illustration of XRP Coins. (Photo; Doc. Cryptonews)

JAKARTA - The role of Ripple Labs Inc, the American blockchain payment company, in XRP circulation continues to be questioned in its legal battle with the United States Securities and Exchange Commission (SEC). It is still not fully understood how Ripple bought back or repurchased XRP coins from Escrow to manage the supply of the cryptocurrency.

This buyback strategy is a step in which the company reduces asset supply by obtaining it from the open market, to create an element of scarcity. However, the right role played by Ripple regarding this buyback is still an unanswered question.

David Schwartz, CTO Ripple, revealed that the company did make XRP purchases, but he is not sure if it is related to the context under discussion. The widespread speculation is not supported by official sources who clearly state the repurchase program.

The XRP buyback can strengthen the SEC's argument that claims Ripple has run XRP as an investment contract. However, in a trial that has been going on for more than 2 years, this buyback has not yet become the main focus.

The lawsuit that determines the fate of XRP in the US has forced Ripple Labs to avoid using the cryptocurrency in its Liquidity Hub. XRP plays an important role in the RippleNet and XRP Ledger protocols, but its use is currently limited until this lawsuit is over. As a result, several Ripple business partners have also avoided using XRP, and the determination of the coin price is now completely market dependent.

The legal battle between Ripple and the SEC continues, while the role and use of XRP in the Ripple ecosystem is still an unanswered question. The final decision in this lawsuit will have important consequences for the company and the crypto asset industry at large.