The outcome of the Veritaseum case could provide guidance to XRP holders seeking answers about what will happen to their assets.
This question has been asked multiple times by thousands of XRP owners awaiting a conclusion on the SEC v Ripple lawsuit, but no answer can satisfy the minds of those asking.
“So what happens to XRP holders if XRP is declared a security and has to be registered with the SEC?”, Twitter user recently asked John Deaton, an attorney representing more than 67,000 XRP holders with amicus curiae status in the case.
“It’s up in the air [to be honest]”, Deaton admitted when he gave a forecast on how it could go down if XRP is considered a security.
“Perhaps, the status quo will remain in place during the appeal. A buyback could be arranged for people in the U.S. I know the SEC offers a Veri token buyback but I don’t know the specifics.
“I’m referring to the Veritaseum case. My understanding is that the SEC seized 98% of Veri’s tokens. The SEC made funds from the money held and offered Veri to buy back if they sold the tokens back to the SEC at a set price.”
The SEC filed a lawsuit against Veritaseum and owner Reginald Middleton in August 2019 alleging that “fraud generated millions of dollars in virtual currency from the sale of unlisted securities called“ VERI ”based on a series of false and misleading statements to potential and real investors., including misrepresentations about the potential profitability and viability of Veritaseum’s purported operations, use of funds raised in VERI ICO, and the amount of funds collected in VERI ICO.The Commission also noted that Middleton misrepresented VERI price and volume on secondary digital asset trading platforms during VERI ICO.
On Nov. 1, 2019, the Court made a final ruling ordering Defendants to pay $ 7,891,600 in disgorgement and $ 582,535 in prejudgment interest, and Middleton to pay a $ 1,000,000 civil penalty.
The final decision created a Fair Fund, so that penalties, along with undue interest and prejudgment, could be distributed to investors harmed by the Defendants ’actions. Investors have until November 1, 2021, to submit a claim for eligibility to the Veritaseum Fair Fund.
The final decision also appointed Holland & Knight, LLP, as the Distribution Agent for the Fair Funds, among others, overseeing the administration and distribution of the Fair Funds to disadvantaged investors and Miller Kaplan Arase LLP as the Tax Administrator to meet the Fair Funds tax obligations.
On February 17, 2021, the Court issued an Order approving the Claims Process and Distribution Plan