HomeNewsBillion-Dollar Showdown: Ripple Victory Could Send XRP Sky High

Billion-Dollar Showdown: Ripple Victory Could Send XRP Sky High

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  • XRP experienced a surge to $0.82 post a federal judge’s favorable ruling in July.
  • Despite initial gains, XRP has declined more than 40%, currently trading at $0.48.

The SEC Saga and XRP’s Market Reaction

In a landmark ruling back in July, an American judge decreed that Ripple‘s XRP was not a security in specific scenarios. This verdict sent ripples (pun intended) through the cryptocurrency market, propelling XRP to an impressive $0.82. Institutional financiers, seeing this positive development, funneled their investments into the digital asset. Furthermore, Ripple’s General Counsel, Stu Alderoty, had forecasted a potential resurgence of U.S. banks adopting Ripple‘s On-Demand Liquidity (ODL) solution.

However, this enthusiasm was short-lived. As of now, XRP trades at a reduced rate of $0.48, marking a 40%+ depreciation in its value.

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Historical Controversy: Ripple vs. SEC

To provide context, Ripple was embroiled in a legal quagmire in 2020 when the U.S. Securities and Exchange Commission (SEC) slapped it with a hefty $1.3 billion lawsuit. The regulatory body contended that Ripple had misled its investors and unlawfully marketed unregistered securities, referring specifically to XRP.

Fast forward to July, a federal district judge, in a nuanced ruling, pronounced that automated sales of XRP to common investors didn’t fall under the securities category. Nonetheless, the judgment acknowledged that contracts amounting to $728 million, earmarked for institutional sales, were indeed unregistered securities sales. Interestingly, both the investor community and Ripple Labs perceived this judgment favorably.

Commenting on the institution-related sales, Judge Torres stated,

“Ripple’s Institutional Sales of XRP were in violation of Section 5 of the Securities Act as they represented unregistered offer and sale of investment contracts.”

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Subsequently, SEC Chair Gary Gensler expressed his dissatisfaction with the verdict, hinting at the possibility of an appeal.

A Glimpse at Ripple’s Genesis and Purpose

Ripple Labs, the mastermind behind XRP, was conceived with a vision. Its goal was to aid banks and financial entities in executing rapid money transfers at negligible costs.

Despite the recent turbulence, it’s noteworthy that XRP is still languishing, with its value 85% lower than its zenith in 2018, which was a staggering $3.40.

Connect with Collin Brown on X (Twitter) for valuable market insights, frequent updates, and a touch of humor! 

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Collin Brown
Collin Brown
Collin is a Bitcoin investor of the early hour and a long-time trader in the crypto and forex market. He's fascinated by the complex possibilities of blockchain technology and tries to make matter accessible to everyone. His reports focus on developments about the technology for different cryptocurrencies.
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