XRP, a cryptocurrency primarily designed for transactions, that can be purchased on crypto exchanges. XRP is derived from Ripple, a payment platform for fast processing of transactions and affordable cross-border transfers designed to complement and redefine the current financial system.
- Why a suitcase between SEC and Ripple?
Ripple is popular with global banks and services. However, in December 2020, the US Securities and Exchange Commission filed a lawsuit alleging that Ripple was making unregistered securities offerings by selling XRP. In its complaint, the SEC said Ripple sold 14.6 billion “units” of XRP for $ 1.3 billion. Later a number of exchanges such as Coinbase, Kraken stopped trading XRP or delisted the asset. Since then, xrp had declined by over 65% Bexplus.
* A security is an investment contract; When the creators of a cryptocurrency advertise it as an investment for US buyers, the SEC regards the coin as security under US law.
- What is the latest evolution of the lawsuit?
Regarding the SEC’s claim, Ripple has disproved the SEC’s argument and issued a response that XRP as a cryptocurrency is outside of the SEC’s jurisdiction and has already been recognized as a virtual currency by several other worldwide regulators, including those in the UK, Japan and Singapore.
Last week, the SEC refused to provide documents related to Bitcoin and Ethereum, arguing that the request had nothing to do with the case. However, Ripple Labs filed a response letter to Judge Sarah Netburn on March 26, requesting the SEC to file the required documents. Because they don’t understand why Ripple is considered security, Bitcoin and Ethereum are not?
A lot has happened in the three months since the fall. Ripple’s price in particular has been damaged and exposed by key partners and many exchanges. However, as the fall continued, the price of Ripple rebounded from a low of $ 0.18.
From today’s perspective, there are mainly four applications in this case. The first is to force the company to discover documents related to the financial information of CEO Garlinghouse and Chairman Larson. The second is the SEC’s motion against Ripple’s fair notification defense. The third is Garlinghouse and Larson’s motion to dismiss the lawsuit against them. Eventually, Ripple filed a motion explaining why it took the SEC 8 years to take legal action. Now US judge Sarah Netburn has instructed both parties (SEC and Ripple) to hold a telephone discovery conference on Tuesday, April 6, 2021.
- Owners ask the relist of XRP online
The cryptocurrency industry and investors are watching the SEC’s lawsuit against Ripple to not only determine the legal status of XRP, but also to set a precedent it could set for other cryptocurrencies. XRP is currently the seventh largest cryptocurrency in the world by market capitalization of more than $ 25 billion. The price of XRP is up nearly 20% in the past two weeks and is currently trading at $ 0.56 at the time of writing, which is close to the pre-lawsuit December level.
One possible reason the owners have vigorously taken advantage of the relist of XRP could be the recent advances in this case. The judge questioned the SEC attorney, “Everyone who has sold XRP – including you and I – is selling illegal securities.” The SEC attorney replied, “No, under Section 4, only Ripple and Ripple affiliates can illegally sell XRP.” “Anyone who sold XRP” did not sell “illegal securities.” The SEC attorney’s responses can be interpreted to mean that crypto exchanges based outside of the United States are not responsible for the sale and trading of XRP. However, only the bottom line will tell if the US exchanges will list XRP again.
Bexplus analysts believe that even if XRP loses the lawsuit, the price of XRP should not fall on the situation it was negotiated in at the start of the litigation, as not all exchanges have delisted the currency so far. For example, the exchange giant Binance continues to support XRP trading and Huobi the buying and selling of XRP.
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