Ripple’s public offering plans, which have been on the agenda for a long time, still cannot be realized due to current legal regulations. In their recent statements, the company’s senior executives stated that they were not considering an approach such as opening to Nasdaq or the New York Stock Exchange in the short term. Finally, David Schwartz, Ripple’s former chief technology officer, pointed out that the basis of the problem is that the current legal framework is not sufficient for the public offering.
Cautious statements from Ripple executives
IPO discussions came to the fore again after the statements made by Ripple CEO Brad Garlinghouse. Garlinghouse emphasized that the performance of crypto companies such as Gemini and Kraken, which went public in a similar manner, did not meet expectations in the stock market, which led them to act cautiously. For this reason, Ripple management is waiting for a more solid ground to form before taking a step in traditional capital markets.
It is emphasized that Ripple’s current share structure is already defined as ‘securities’ under US law, so tokenizing company shares or buying and selling them as crypto assets is very legally complex.
This dimension added by David Schwartz also reveals that Ripple stock and XRP are completely different financial products. While XRP is used in the company’s payment network as a digital asset, Ripple stock represents company ownership and is subject to a different legal regime. This difference is one of the main reasons for the confusion in the market.
Current regulations do not allow
Current law in the US does not allow private company shares to be publicly tokenized and traded on crypto markets. Securities regulations ensure that only certain investors – i.e. accredited individuals – can buy and sell Ripple shares on the secondary market. Even these transactions are subject to extremely strict conditions.
David Schwartz underlined that as of today, there is no legal infrastructure that opens Ripple’s shares to all users and allows them to be traded freely. In short, the only obstacle on the way to public offering is not based on technical or company strategy, but entirely on regulations.
It should also be reminded that Ripple is a company founded in 2012 and known for its blockchain-based payment solutions. The company is known for its technologies that speed up international money transfers, especially between banks, and although it is based in the USA, it operates on a global scale.
Market interest continues
Although Ripple’s direct public offering does not seem possible in the short term, the company’s value and potential Wall Street exit continue to attract interest in the markets. According to previous estimates by research company CB Insights, Ripple’s market value is expected to reach $ 40 billion if such an IPO takes place.
“Ripple President Monica Long said earlier this year that the company’s priorities are regulatory compliance, infrastructure investments and corporate partnerships, and going public is not a near-term goal.”
However, for now, Ripple management is focusing on the clarification of the ongoing legal process with the SEC and a more solid regulatory infrastructure, rather than the public offering process. The outcome of the lawsuits filed with the US Securities and Exchange Commission (SEC) will be decisive for the company’s strategic moves in the coming period.
