In December 2020, Ripple Labs two of its two top-level executives faced legal actions from the US Securities and Exchange Commission. The reason behind the lawsuit was the allegation that the XRP coin was being treated as a security, raising over 1.38 billion dollars via unregistered security offerings in 2013.
It looked as if Ripple’s time was over, and it would lose its place in the top 10 cryptocurrencies. SEC’s entire case depends on the accusation that Ripple is a security. CRP prevailed on two topics in recent rulings – SEC’s crypto discussions and internal memos. However, it does not end the trial.
Why is XRP’s Price Increasing?
As of mid-April, XRP had increased 532% over the previous 12 months, and things also took a favorable turn recently in the SEC lawsuit, with the defendants prevailing in two discovery rulings — even turning the tables on the regulatory agency by winning access to the SEC’s internal memos and minutes with regard to crypto discussions, which positively impacts the XRP price prediction.
Social media is filled with predictions that Ripple will not only win the case but also reach a value of 20 dollars from 1.40 dollars. Numerous traders and influencers have openly endorsed #XRP. Experts believe that another reason behind XRP’s growth is the bullishness of the crypto market in general.
Will XRP win the Case Against SEC?
While Ripple has won a small battle, winning the entire case will be extremely challenging. One reason behind it is that the case is being conducted in New York. The judges in NY are familiar with the SEC’s ins and outs.
Another trouble for Ripple is that the same court announced an unfavorable verdict for Kik (a messenger application), resulting in it losing Kin (a cryptocurrency). With a winning percentage of 69%, SEC looks to be the more dominant side. It would be extremely premature to divine any significance from interim rulings.
However, If XRP manages to prove that it is not a security, the entire basis of the SEC’s case will crumble.
Will XRP Continue to Grow in the Near Future?
XRP is perhaps still a long way off from the finish line, and the outcome is far from certain. XRP remains one of the riskiest assets among the top 10 cryptocurrencies by capitalization due to its vulnerability to the actions of the US judicial system. Further growth of the asset above the current historical maximum will determine its legal status and distribution according to the Ripple roadmap. If altcoins continue to grow strongly, XRP could also rise in price. The Ripple coin is very susceptible to manipulation, and the movements of its quotes can be very unpredictable.
CEO of Galaxy Investment Partners Mike Novogratz recently commented on XRP, calling the recent price rise from $0.40 to $1.60 in a month as a retail frenzy and that it didn’t make sense.
Novogratz mentioned that people should consider the volatility when investing in cryptocurrencies, saying, “We expect volatility.”
The U.S. District Court’s recent rulings are certainly favorable to Ripple, but the game is far from over. If the SEC insists on registration, it will be up to Ripple to decide if that makes financial sense. If it does, a registered token will actually have more value and be more readily traded.