Ripple vs. SEC Showdown Nears Finale: XRP Rallies as Crypto Giants Eye the Aftermath

The case, which began in December 2020, revolves around the SEC’s accusation that Ripple raised $1.3 billion through an unregistered securities offering via the sale of XRP tokens. Ripple has maintained that XRP is a digital currency, not a security.

Key Developments in the Case

In August 2024, U.S. District Judge Analisa Torres issued a split ruling. While she ruled that Ripple’s programmatic institutional sales of XRP were in violation of securities laws, she determined that such sales to retail investors were not. Ripple was fined $125 million and ordered a permanent injunction against future sales to institutional investors.

Ripple seeks better terms in its SEC case to avoid admitting wrongdoing and reduce its $125M fine. Source: Eleanor Terrett via X

This week, news broke that Ripple’s legal team is lobbying for improved conditions because the SEC, with Acting Chairperson Mark Uyeda at the helm, has since withdrawn enforcement charges against other cryptos like Coinbase and Kraken. Ripple has been lobbied through two unnamed insiders who confirmed that they were lobbying for the removal of the injunction for being regulation-friendlier according to the new leadership of the SEC.

The SEC is gearing up to bring the Ripple-XRP lawsuit to a close. Source: Watcher.Guru via X

Commented crypto attorney James Murphy, also known as MetaLawMan, that Ripple’s accommodation of the ruling may be good if the firm has subsequent securities offerings or an IPO planned. “Ripple’s focus is on clearing regulatory hurdles to ensure seamless institutional sales,” Murphy stated.

Impact on XRP Price and Market Sentiment

The expectation of a positive result has optimism surrounding the XRP market. Following the news, XRP gained 7% to $2.25 from a daily low of $2.13. Experts are convinced that if XRP holds support at $2.00, it could test the resistance level of $2.72 and potentially reach its seven-year high of $3.40.

XRP was trading at around $2.23, up 1.32% in the last 24 hours at press time. Source: XRP Liquid Index (XRPLX) via Brave New Coin

Analysts point to high trading volume and institutional demand as the reasons behind the bull run. On-chain metrics show a flurry of whale activity, with large XRP addresses moving tokens to private wallets as a sign of long-term conviction. In addition, positive sentiment in social media platforms and additional “XRP breakout” hashtags have also driven the increasing retail interest.

Fundamental Drivers Behind XRP’s Resurgence

• Ripple’s Growing Global Adoption: Ripple’s On-Demand Liquidity (ODL) solution has propagated across key markets like Asia, Latin America, and the Middle East, driving the adoption of XRP for cross-border payments.
• Strategic Partnerships: XRP’s collaborations with other prominent financial institutions such as Santander and SBI Holdings continue to strengthen XRP’s position as a bridge currency.
• Technological Advancements: The inclusion of smart contract capability via Hooks and the upcoming availability of the XRP Ledger’s sidechain ecosystem enhance its functionality and attractiveness to developers.
• Institutional Confidence: Institutional investors are increasing XRP exposure as Ripple’s legal certainty draws near, ready to reap long-term gains.

Implications for the Crypto Industry

1. Regulatory Clarity: A final decision could set a precedent for how digital assets are classified and regulated in the U.S.
2. Market Confidence: Resolving the case could bolster investor confidence in XRP and other cryptocurrencies.
3. Ripple’s Growth Prospects: With reduced legal uncertainties, Ripple can expand its services and forge new partnerships.

Final Thoughts

As the SEC vs. Ripple saga nears its finale, the outcome is poised to reshape the regulatory landscape for digital assets. With Ripple’s legal team negotiating favorable terms and XRP prices showing resilience, the crypto community eagerly awaits the final verdict. Whether the SEC will lift the injunction or find a middle ground remains uncertain, but the ripple effects will undoubtedly be felt across the cryptocurrency market.