As an analyst with a background in financial markets and experience following the cryptocurrency industry, I believe that Ripple’s ongoing legal battle with the SEC is a significant event for the crypto market, particularly XRP. The case has gone through several twists and turns, with some recent developments seemingly shifting the balance in favor of Ripple.
TL;DR
- Ripple’s ongoing legal battle with the SEC over XRP sales has seen some favorable rulings for the company.
The lawsuit’s outcome is expected to cause significant volatility for XRP and the broader crypto market, with potential for a rally if Ripple wins.
The Case’s Current Status
Approximately three and a half years have passed since the US Securities and Exchange Commission (SEC) initiated legal action against Ripple, accusing it and certain executives of selling unregistered securities in the form of XRP. The proceedings experienced various twists and turns, generating significant interest within the cryptocurrency community.
Last year saw some significant advancements, and these events seemingly put the SEC at a disadvantage in the ongoing legal dispute. For instance, in July 2023, Judge Torres made a ruling that Ripple’s sales to secondary trading platforms were not considered offers of investment contracts.
After a brief delay, the magistrates rejected the regulator’s plan to challenge the ruling. Meanwhile, Brad Garlinghouse and Chris Larsen, both CEO and Executive Chairman respectively, were found not guilty of any wrongdoing.
As a crypto investor following this particular case, I’m excited that we’ve reached the trial phase in April of this year. A verdict could be announced any day now. Yet, I must acknowledge the intricacies of the legal process and other crucial factors at play which may extend the lawsuit indefinitely.
As a crypto investor following the Ripple case closely, I’ve noticed that the potential penalty for Ripple has been a topic of much debate. Initially, the SEC proposed a fine of $2 billion against the firm. However, Ripple strongly disagreed and insisted on paying no more than $10 million. More recently, the agency revised its demand to $102.6 million, explaining:
The SEC doesn’t base the penalty for Ripple on the ratio of the Terraform settlement penalty to the gross profits of the infringing actions. This ratio (420 million dollars / 3.587 billion dollars) equals approximately 11.7%. Applying this percentage to Ripple’s reported gross profits of 876.3 million dollars results in a much larger penalty amount – around 102.6 million dollars – which is significantly more than the 10 million dollar ceiling that Ripple has proposed.
The Possible Impact on XRP
Some hold the view that the final result of the lawsuit could lead to significant fluctuations in Ripple’s native token XRP and the broader cryptocurrency market. In the event of a clear victory for Ripple, there is a likelihood of an XRP price surge, as seen following their initial win last year.
On the other hand, an SEC victory may have the opposite effect, triggering a potential pullback for the crypto sector. Those curious to learn more about the case and its impact on XRP, please take a look at the video below:
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2024-07-01 14:38