Ripple, XRP Latest News- The SEC Lawsuit
Let’s talk Ripple and XRP.
Earlier this week, the overall market cap of cryptocurrencies hit $3.3 trillion. It’s an amount that merits attention and has further prompted regulators and financial authorities to accelerate the tempo in writing a regulatory rulebook for the market.
However, first they’ll need to cut through their own confusion on how these financial instruments work.
Can all digital assets be categorised as a form of currency or are some them securities masquerading as currencies? It’s one question among many that regulators are asking.
One blockchain company that knows this all too well is San Francisco’s Ripple. A fintech company that popped up a decade ago, Ripple Labs originally promoted a strategy that would offer financial institutions a new low-cost method of performing expedient trans-border money transfers.
To achieve as much, Ripple Labs built the technical infrastructure on which transactions sped across the globe in the form of a cryptocurrency identified as XRP. Ripple created 100 billion units of XRP in 2012 and allotments were sold off while Ripple remained a majority holder.
This is where Ripple found itself in trouble with the Securities and Exchange Commission (SEC). Because of the way in which XRP was distributed, it appeared, to some, that XRP functioned more like a stock or security rather than a currency. By December 2020, SEC chairman, Gary Gensler, had seen enough and initiated a lawsuit against Ripple Labs for how the company distributed XRP, claiming the company was selling an unregistered security, not a currency.
Lawsuit Causes Anxiety Among XRP Supporters
The pending case initiated a sequence of negative events that cratered the price of XRP and got the asset delisted from many popular crypto exchanges, the most crippling being Coinbase. The lawsuit has continued to drag on causing anxiety among XRP supporters and investor, and many legal experts have said that the lawsuit is unlikely to have an ending this year.
However, Ripple has demonstrated some legal prowess since the lawsuit was filed, accruing small victories in the proceedings while simultaneously attracting troves of new investors who have faith in a favourable outcome. Frankly, at the current rate of mainstream adoption, a settlement deal could be reached at any time and November 2021 is expected to be particularly revealing in terms of what’s next for the lawsuit.
Today will be a crucial as it marks the deadline for the exchange of Expert Rebuttal Reports, an expert analysis of each opposing party’s claims. Once those reports are submitted, the second half of November should be rife with opinions on where the lawsuit is headed and when it might finally get resolved.
Getting down to brass tacks, it seems that Ripple has the momentum and SEC Chair Gary Gensler can’t be pleased with how things have unfolded with his lawsuit. The inability to close a ‘slam dunk’ case against a gritty crypto start-up hardly has any place on a resume for someone who’s vying to be the next Secretary of the Treasury. Will Gensler broker a settlement deal with Ripple? It’s possible.
If so, not only would it be a move that would put XRP right back on the exchanges that delisted it, including Coinbase, it would be a ‘drinks for everyone’ kind of announcement that would send the whole market upward.
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Author: Greyson Kelly
Greyson Kelly is a business writer living in Milwaukee, Wisconsin. He writes extensively on technological trends, cryptocurrency, and ‘cutting edge’ industry topics. He has an MBA in Business and has over a decade of experience in communications and public relations.