7 months ago
21 ARTICLE AD
Ripple has allegedly moved all US ODL customers from using XRP as the bridge currency, to USDT, in compliance with a 2023 court ruling.
A recent court filing submitted by Ripple against the United States Securities and Exchange Commission (SEC) reveals that Ripple has made a few changes to its services in the United States. According to the filing, Ripple now uses Tether’s USDT instead of XRP as the bridge currency for its On-Demand Liquidity (ODL) services for US clients.
Ripple Uses USDT for ODL in the US
Ripple’s decision to switch to USDT stems from last year’s court ruling, which concluded that the institutional sale of XRP tokens violates security laws in the US. Following the verdict, Ripple decided to use non-US entities as contract parties to handle the sale of XRP to ODL customers. The filing also notes that all ODL clients in the US now use “a non-XRP bridge currency”.
In addition to the filing, a popular XRP proponent Crypto Eri posted an update on X. Crypto Eri’s post contains a screenshot of an alleged internal note from Ripple President Monica Long detailing the company’s move to XRP from USDT. According to Long:
“Immediately following the Order, we took steps to migrate each US-based ODL customer from using XRP as the bridge currency in ODL to using USDT (or the contract was terminated.) We should continue to use USDT (or BTC or other vetted stablecoins) for US based flows unless otherwise approved by Legal.”
Making this change indicates Ripple’s willingness to continue providing its ODL services to customers in the US, while adhering to legal restrictions. Long’s message specified the non-US entities used for ODL are Singaporean. The Ripple president noted that these entities are the primary contracting entities used to sell XRP contracts to new ODL customers “who are predominantly foreign.”
Long also included an XRP minimum requirement enforced in 2023. According to Crypto Eri’s image, Ripple required all ODL customers or their corporate owners to have at least $5 million in assets, except for “otherwise sophisticated entities.” She added that Legal gets to determine whether or not an entity qualifies as “sophisticated.” The rule is likely to ensure that ODL clients have robust reserves to continuously cater to their business needs and protect the end customers.
XRP Sales May Affect Ripple’s Revenue
Ripple’s filing contains indications that XRP sales are integral to the company’s financials. The document shows that according to Ripple’s accounting expert, Anthony Bracco, Ripple’s books show that without accounting for revenue from the sale of XRP, the company operated a loss from April 1, 2014, through December 22, 2020.
Ripple recently filed a motion against the SEC, disputing the agency’s request for a $2 billion fine against the company. According to Ripple, the fine should be $10 million at most. In the filing, Ripple notes that it is willing to adhere to guidance in the future. However, the company says the SEC’s requests are “Draconian” and “ungrounded in law or principle”. Ripple has asked the court to reject the request.
