Crypto enthusiasts are buzzing about a fascinating possibility: Could Ripple actually pay the $125 million penalty in its ongoing legal battle with the US SEC using XRP tokens? Legal expert Jeremy Hogan has weighed in, suggesting this might be a viable route, potentially adding those very XRP coins to the newly established US Digital Asset Stockpile. This intriguing idea comes hot on the heels of former US President Donald Trump’s executive order to create a national reserve for Bitcoin and other digital assets.

How Ripple’s $125 Million Penalty Could Form Part Of The US XRP Stockpile

In a recent X post, Jeremy Hogan shared his expert opinion, noting that while the court judgment is in US dollars, it might be possible for Ripple to settle its dues in the XRP lawsuit by simply transferring an equivalent amount of XRP to the designated Federal XRP stockpile address.

To bolster his argument for Ripple paying in crypto, the lawyer pointed to a noteworthy Supreme Court case, Willard v. Tayloe. Hogan explained that in this case, the court actually mandated the fulfillment of a contract using gold, rather than dollars – setting a precedent for alternative forms of payment.

The crux of the Willard case, as highlighted by the legal expert, was the court’s principle that such alternative payment methods are permissible if they serve the interests of justice and don’t unfairly burden either party. Therefore, Judge Analisa Torres, the judge who ruled against Ripple, might very well allow the crypto firm to pay the penalty in XRP if she deems it a just and equitable solution.

Expanding on this, Hogan suggested that although the Willard case was rooted in equity law, the same guiding principle could apply to the Ripple lawsuit against the SEC, particularly if both parties agree to the XRP payment. However, he cautioned that the SEC‘s agreement is a critical factor, emphasizing that this arrangement hinges on their approval.

Hogan’s theory gains further traction in light of Donald Trump’s executive order aimed at establishing a Strategic Bitcoin Reserve and Digital Asset Stockpile. Crucially, XRP is anticipated to be among the cryptocurrencies the US intends to hold in this stockpile.

The Bigger Problem In This Arrangement

Hogan did raise a potential complication: the $125 million owed by Ripple is a penalty, and typically penalties are supposed to go directly to the US Treasury. However, he quickly addressed this, stating it shouldn’t pose a significant obstacle since the Treasury is also the governing body overseeing the XRP stockpile.

To illustrate a potential benefit, Hogan painted a scenario where the US might have actually missed out on a substantial sum – possibly half a billion dollars. This could have happened if Ripple had been obligated to convert XRP to US dollars at the time they and the SEC agreed to hold the penalty in escrow while the appeal process played out.

This is because the value of XRP has significantly increased since then. Had those escrowed funds been held in XRP, the government could potentially have seen a much larger return. Hogan proposed that this “what if” scenario could be a compelling point to bring to Judge Torres’ attention if she questions the practicality of XRP payment for the penalty.