Regulation
Ripple vs. SEC Settling, Could XRP Finally Take Off?
The ongoing legal battle between Ripple Labs, the company behind the XRP Ledger blockchain, and the US Securities and Exchange Commission (SEC) appears to be nearing a conclusion, with the possibility of a significant XRP price increase on the horizon.
SEC Lowers Proposed Settlement Offer
In a recent development, the SEC lowered its proposed settlement offer from a staggering $2 billion to $102.6 million, marking a potential turning point in the case that has cast a long shadow over the cryptocurrency industry .
The saga began in December 2020 when the SEC accused Ripple of selling XRP, the native token of the XRP Ledger, as an unregistered security. This accusation resulted in a $2 billion demand from the SEC, which includes disgorgement, prejudicial interest and civil penalties.
Ripple has vehemently disputed this figure, arguing for a settlement closer to $10 million. Their legal team argued that the SEC’s initial proposal was excessive, citing the recent settlement between the SEC and Terraform Labs, the company responsible for the Luna cryptocurrency.
In that case, the SEC accepted a penalty of between 0.6% and 1.8% of Terraform Labs’ revenue, acknowledging the company’s failure and its commitment to take substantial corrective action.
However, the SEC argued that the Terraform Labs case was not an appropriate comparison.
They pointed out that Terraform Labs agreed to burn its remaining Luna tokens and remove its founders from leadership positions, actions that Ripple did not offer to take.
The SEC says the reduced offering of $102.6 million remains crucial to deterring future misconduct in the cryptocurrency market.
The legal battle has had a tangible impact on the price of XRP. Despite ongoing partnerships, a growing user base, and the development of a robust application ecosystem on XRP Ledger, XRP is currently the seventh largest cryptocurrency by market capitalization (approximately $27.7 billion).
Analyst projection on X
However, its price remains stagnant at around $0.49. Industry observers, such as former Ripple director Sean McBride, believe so a significant increase in the price of XRP is likely once the SEC case is finally resolved. Some analysts have even predicted a potential price increase of up to $5 for XRP.
Key developments in the case
The legal debate has also seen some key developments. On June 14, 2024, Judge Analisa Torres issued a landmark decision, ruling that Ripple violated securities laws by selling XRP to certain institutional buyers.
However, he rejected the SEC’s broader claims that sales of XRP on exchanges and via algorithms also constituted unregistered securities offerings.
This decision was seen as a partial victory for Ripple and the cryptocurrency industry as a whole, as it provided greater clarity regarding the regulatory landscape for digital assets.
While the final decision on the SEC’s revised settlement offer is still pending, Ripple CEO Brad Garlinghouse has reportedly indicated a potential resolution by September 21, 2024.
This timing, along with the reduced transaction offering, injected a sense of optimism in the XRP community. A definitive conclusion to the lawsuit could pave the way for the long-awaited rise in the price of XRP, potentially pushing it towards the prices expected by analysts.
However, Judge Torres’ final decision will ultimately determine the fate of XRP and its role within the broader cryptocurrency ecosystem.