Pro-XRP blockchain researcher Leonidas Hadjiloizou has tweeted a question related to the recent verdict of Judge Analisa Torres — the one that made XRP partly a security and partly not. Ripple's chief technology officer responded, voicing the position of Ripple Labs on this issue.
What's legal status of ODL XRP sales now?
As reported by U.Today earlier, Torres ruled that Ripple's XRP sales made to financial institutions are to be deemed securities. However, its programmatic sales, other distributional sales and XRP sold by Brad Garlinghouse and Chris Larsen are not.
Hadjiloizou tweeted that according to the date at his disposal, Ripple stopped its institutional sales of XRP as they were replaced with sales of On-Demand Liquidity (ODL) XRP. Here, a question arose as to whether all the XRP sold by the blockchain company in relation to its ODL service are now to be deemed securities.
Ripple CTO shares how things stand
CTO David Schwartz responded to the tweet. He wrote that Ripple's legal team is currently busy clarifying this question. He confirmed that, at the moment, Ripple does not sell XRP in relation to ODL with a US Nexus. However, not being able to do that does not seem to be a big deal for the company.
However, Ripple can still conduct ODL operations in the U.S. as long as Ripple does not issue any XRP itself.
US Nexus means financial operations in a foreign currency with any U.S. dollar-denominated transactions or clearance through the financial system of the U.S.
We're still figuring this out. We don't currently have ODL-related sales with a US nexus and not being able to do so is not really a huge deal. We can still do ODL in the US so long as XRP is never sourced from Ripple.— David "JoelKatz" Schwartz (@JoelKatz) July 14, 2023
Twitter user @XrpYoda also asked Schwartz about the legal status of XRP released by Ripple from escrow; it has been done on a monthly basis since January 2018, with a billion XRP released each month and then around 700 million coins locked back.
However, the Ripple CTO did not answer that one.
At the time of publishing this article, XRP continues to trade at the $0.7727 level, showing a nearly 64% rise over the span of the past 24 hours, according to data from CoinMarketCap.