SEC vs Ripple case influence on XRP price in UK
Ripple entered the crypto space back in 2012 as a promising project. It offered a low-priced, fast, and cross-border money transferring service that gained great popularity. However, in 2020, it faced a severe lawsuit from the Securities and Exchange Commission (SEC) in the United States. The case is yet to be concluded, but it has affected the popularity of XRP.
Ripple faced a lawsuit because it deviated from its fundamental goal of providing secure cross-border money transferring service. However, its impact on the token’s price is still unclear. So, if you are wondering about the XRP price in the UK, here are some insights!
What is the SEC vs Ripple case?
The US’s Securities and Exchange Commission (SEC) filed a case on Ripple Labs in December 2020 for raising funds through XRP. In 2013, the firm allegedly raised more than $1.3 billion through illicit means. The complaint from the SEC involved charges against the current and previous executives for making gains.
As per the SEC’s complaint, the company raised capital by holding its native token’s Initial Public Offering (IPO) without registering it as a security. The firm sold XRP as an unregistered security to the investors. Investors bought the tokens considering their shares in a venture, hoping their price would gradually increase.
According to the SEC press release ‘Ripple allegedly distributed billions of XRP in exchange for non-cash consideration, such as labor and market-making services. According to the complaint, in addition to structuring and promoting the XRP sales used to finance the company's business, the founders Larsen and Garlinghouse also effected personal unregistered sales of XRP totaling approximately $600 million’. SEC advocates that these tokens should be classified as securities rather than utility tokens.
On the other hand, Ripple claims that the SEC did not warn the firm about the issue. According to its lawyers, the SEC did not notify Ripple’s executives about the classification of XRP as a security. The US regulator also confirms this stance.
Moreover, lawyers also claim that the SEC has been biased towards the firm. They have claimed that various crypto firms like Ethereum have connections with a few SEC members. However, it has not been established in court yet.
What will be the implications on XRP price (UK)?
So far, the US court has not announced a date for giving the verdict, but the case is approaching conclusion. The proceedings of the case might not only affect Ripple Labs but can also negatively impact the crypto market. The reason is that if the court weighs in with SEC’s claim of XRP being declared a security, it would also apply to various other virtual currencies working with the exact mechanism.
If the court declares the token a security, the XRP price will come crashing down. The XRP price in the UK might not be able to recover. Also, as it can be a legal precedent for all the countries, it will likely affect the entire crypto market. Moreover, Ripple can question Ethereum too, as it can also fall under the definition of security. This might further aggravate the ongoing crypto winter.
Nonetheless, this would be the case only if the SEC wins the case. Otherwise, if Ripple Labs wins this court battle, we might see the XRP price (UK) getting strengthened.
Author: Wasay Ali
Wasay Ali is a versatile professional writer with global experience and a background in mechanical engineering and social science. He is adept at crafting news and informational content for the crypto space and has experience writing for other niches. He is a professional SEO content writer who has worked with several digital marketing agencies and clients in the US, UK, Pakistan, and Europe. He is a dedicated volunteer and enjoys reading, writing, poetry, and going to the gym. He is an INFJ-A personality type dedicated to positively impacting the world. Wasay has a passion for writing as it allows him to express his creativity, share his knowledge, and connect with people worldwide.