Ripple Shifts US ODL Customers to USDT in Compliance with Court Ruling

Ripple has allegedly migrated all US On-Demand Liquidity (ODL) customers to use USDT as the bridge currency instead of XRP, in accordance with a 2023 court ruling. This change stems from the ruling that XRP sales violated US security laws, prompting Ripple to use non-US entities to handle XRP sales for ODL customers, who now use "a non-XRP bridge currency."

Ripple Abides by Court Ruling, Shifts US ODL Customers to USDT

In a significant move, Ripple has transitioned all On-Demand Liquidity (ODL) customers in the United States from using XRP as the bridge currency to Tether's USDT, in compliance with a 2023 court decision. This strategic shift underscores Ripple's commitment to operating within legal frameworks while maintaining its US presence.

Court Ruling Triggers Currency Switch

Ripple's decision to switch to USDT as the bridge currency for its ODL services in the US stems from a court ruling last year, which deemed the institutional sale of XRP tokens to violate US securities laws. In response to the verdict, Ripple initiated steps to align with regulatory mandates.

Non-US Entities Facilitate XRP Sales

Ripple's filing reveals that all ODL customers in the US now utilize "a non-XRP bridge currency," reflecting the company's adherence to the court's ruling. To facilitate the sale of XRP to ODL customers, Ripple has designated non-US entities as contract parties, ensuring compliance with legal restrictions.

Internal Memo Outlines USDT Transition

An internal note allegedly penned by Ripple President Monica Long provides further insight into the company's transition from XRP to USDT. According to Long, Ripple "took steps to migrate each US-based ODL customer from using XRP as the bridge currency in ODL to using USDT" immediately after the court order was issued.

Eliminating XRP as a US Bridge Currency

Long's memo emphasizes that USDT (or other vetted stablecoins) should be used for US-based flows unless otherwise approved by the legal department. This directive underscores Ripple's commitment to eliminating XRP as a bridge currency within the US market.

ODL Services Remain Available in US

Ripple's transition to USDT as the bridge currency in the US ensures that the company can continue providing ODL services to US customers while adhering to legal restrictions. The use of non-US entities for ODL contracts further strengthens Ripple's compliance posture.

XRP Minimum Requirement Enforced

Ripple's internal memo also reveals that the company has implemented a minimum XRP requirement for certain ODL customers or their corporate owners. With the exception of "otherwise sophisticated entities," individuals or institutions must maintain at least $5 million in assets. The purpose of this requirement is to ensure that ODL clients have sufficient resources to support their business operations and safeguard end customers.

XRP Sales Key to Ripple's Financials

Ripple's filing indicates that XRP sales play a significant role in the company's financial performance. According to Ripple's accounting expert, Anthony Bracco, the company incurred losses from April 2014 to December 2020 if XRP sales revenue is excluded from the books.

Ripple Opposes SEC Fine, Seeks Guidance

Ripple recently filed a motion disputing the Securities and Exchange Commission's (SEC) request for a $2 billion fine. The company argues that the fine should be limited to $10 million at most. Ripple expressed a willingness to comply with future guidance but deemed the SEC's requests "Draconian" and lacking legal basis.

Ripple Remains Committed to Compliance

Ripple's transition to USDT for US ODL customers and its opposition to the SEC's excessive fine demonstrate the company's unwavering dedication to operating within legal frameworks and upholding the integrity of its financial operations. Ripple's commitment to compliance ensures that the company can continue providing innovative financial services while adhering to regulatory requirements.