Back in December of 2020, the Securities and Exchange Commission (SEC) posted a complaint alleging that Ripple engaged in the sale of an unregistered security. The enforcement action included Christian Larsen, the company’s co-founder, executive chairman of its board, and former CEO, and Bradley Garlinghouse, the company’s current CEO. The SEC alleged that Ripple and the two respondents had raised over $1.38 billion through an unregistered, ongoing digital asset securities offering.
In the days following the revelation of the lawsuit, XRP, the native crypto of Ripple, drooped in value. At the beginning of 2021, XRP was trading for around $0.22.
Today, as the legal battle with the Feds drags on, XRP has regained some of its luster. Recently, XRP topped $1.00 in value and as of today, trades around $0.90.
Chatter on Twitter, and elsewhere, regarding Ripple has always been robust, to say the least. XRP holders are some of the most vocal crypto advocates in the crypto sphere. Recent updates on the lawsuit may be helping to drive the price of XRP higher. Recently Ripple won a significant discovery motion regarding internal SEC discussions about whether Ripple’s XRP is more of a digital currency, similar to Ether or Bitcoin, or something else. The SEC has publicly stated that Ether is not a security as it is sufficiently decentralized. The nuance is important as the SEC does not regulate currencies nor commodities – only securities.
While fighting the Feds tends to be a losing battle, Ripple does have some things going for it. First, Ripple reportedly has significant funds on hand for a prolonged battle, and second, Ripple has hired some hire-powered attorneys to fight its battle, a law firm that includes former SEC Chair Mary Jo White who believes the Commission is “dead wrong” in its pursuit of the company.
Regardless of the outcome and complaints that the SEC is regulating by enforcement, the entire crypto industry will be closely watching the outcome of the Ripple lawsuit.