Regulation
Ripple vs SEC Nears Resolution, Could XRP Finally Take Off?
The ongoing legal battle between Ripple Labs, the company behind the XRP Ledger blockchain, and the US Securities and Exchange Commission (SEC) appears to be nearing an end, with the possibility of a significant price rise XRP on the horizon.
SEC Reduces Proposed Settlement Offer
In a recent development, the SEC lowered its proposed settlement offer from a staggering $2 billion to $102.6 million, marking a potential turning point in the case that has cast a long shadow over the cryptocurrency sector.
The saga began in December 2020 when the SEC accused Ripple of selling XRP, the native token of the XRP Ledger, as an unregistered security. This charge resulted in a $2 billion demand from the SEC, including disgorgement, prejudgment interest and civil penalties.
Ripple vehemently disputed this figure, arguing for a settlement closer to $10 million. Their legal team argued that the SEC’s initial proposal was excessive, citing the recent settlement between the SEC and Terraform Labs, the company responsible for the Luna cryptocurrency.
In this case, the SEC agreed to a penalty of between 0.6% and 1.8% of Terraform Labs’ revenue, recognizing the company’s bankruptcy and its commitment to take substantial remedial action.
However, the SEC argued that the Terraform Labs case was not an appropriate comparison.
They pointed out that Terraform Labs agreed to burn its remaining Luna tokens and remove its founders from management positions – actions Ripple has not offered to take.
The SEC maintains that the reduced settlement offer of $102.6 million remains crucial to deter future misconduct in the cryptocurrency market.
The legal battle has had a tangible impact on the price of XRP. Despite ongoing partnerships, a growing user base, and the development of a strong app ecosystem on XRP Ledger, XRP currently ranks as the seventh largest cryptocurrency by market capitalization (approximately 27.7 billion of dollars).
Analyst projection on
However, its price remains stagnant at around $0.49. Industry observers, such as former Ripple executive Sean McBride, believe that a significant increase in the price of XRP is likely once the SEC lawsuit is finally resolved. Some analysts have even predicted a potential price rise of up to $5 per XRP.
Key developments in the case
Legal wrangling also saw key developments. On June 14, 2024, Judge Analisa Torres issued a landmark ruling, ruling that Ripple violated securities laws by selling XRP to certain institutional buyers.
However, she rejected the SEC’s broader assertions that sales of XRP on exchanges and through algorithms also constituted unregistered securities offerings.
The move was seen as a partial victory for Ripple and the crypto industry as a whole, as it brought greater clarity regarding the regulatory landscape for digital assets.
While a final decision on the SEC’s revised settlement offer is still pending, Ripple CEO Brad Garlinghouse has reportedly indicated a potential resolution by September 21, 2024.
This schedule, coupled with the reduced settlement offer, injected a feeling of optimism in the XRP community. A definitive conclusion to the trial could pave the way for XRP’s long-awaited price breakout, potentially propelling it towards the price levels predicted by analysts.
However, Judge Torres’ final ruling will ultimately determine the fate of XRP and its role within the broader cryptocurrency ecosystem.