The Ripple vs SEC case has been going on for a little over two years now, and the end is nowhere in sight. Nothing is certain though. The case has also adversely affected XRP’s price and it continues to roam the sub-dollar region. Ripple is the fifth largest cryptocurrency by market cap ($19.7 billion)
Nobody knows when the fluctuation crosses the normal threshold and becomes a massive landslide. It all happens within moments for all cryptocurrencies, which is precisely why you need a super-fast internet connection like CenturyLink internet so you can stay ahead of the curve and save your investment.
Regardless, all eyes are set on the Ripple vs SEC case as many people believe that the case is drawing to a close. Ripple’s CEO also believes that the court will wrap up the case before 2023 ends. Read on as we briefly explain the highlights and what a positive or negative verdict would mean for the investors and the rest of the world.
SEC’s Stance
The SEC defines security as a tangible token like a note, which is used to trade value, and it gives a return to the holder. A commodity is something that holds a certain value but isn’t used as a means of trade. If crypto is deemed a security, the company issuing them must comply with SEC’s Security Regulations, or pay a fine that could go as high as $100 million.
The SEC claimed in its case that the XRP sale after its inception was illegal and breached the financial code of conduct set forth by the SEC. They meant that XRP wasn’t a commodity and didn’t hold any value, but instead was a security and should’ve been registered with the SEC as such. Since they did not, so now, the XRP sale should be halted and several penalties should be imposed on Ripple, the parent company.
Ripple’s Stance
Ripple claims that XRP is not a security but a token that’s intended to transfer money across borders in the future. It’s important to note that there is no regulatory clarity on cryptocurrencies since the US hasn’t set any laws or even the framework for such laws.
Ripple’s lawyer believes that SEC is merely trying to make an example out of Ripple, but they will not go down without a fight. If the court decides to make a ruling against Ripple, they’ll also have to impose penalties on several other cryptocurrencies.
For the most part, every crypto project has started this way. They’re essentially giving out crypto, created by themselves, to the people, and getting their money, which they use to invest in further infrastructure development. This is done so that the project can grow up to a point where it can see real-world implementations, and grow as a commodity.
The Hinman Speech
A big reason why Ripple is the favorite to win the case is the William Hinman speech. He was the Director of the Corporation Finance division of the SEC in 2018 before the case was filed against Ripple. In this speech, he talked about XRP as a virtual currency and a commodity, that can be traded, just like many other cryptocurrencies.
At the time of this speech, he was an investor in Enterprise Ethereum Alliance and received millions of dollars from Ethereum’s growth. So he created a different set of rules for Ethereum, let it slide, and later on, filed a lawsuit for the very reason that benefited him from Ethereum. Ripple’s lawyers moved to include this speech in the case proceedings, and the SEC moved to make this document sealed, which it was sealed, but the contents are already out in the open.
XRP Price Analysis
Many in the crypto world believe that the current XRP is lower than what it is supposed to be. This belief stems from the previous bearish and bullish trends of the market. Normally, the market is on an upward or bullish trajectory when Bitcoin’s price increases, including the small altcoins. The same is true for when its price goes down, the whole market crashes.
However, XRP’s price has largely remained unaffected during the market ups and downs. But it’s strongly believed that there will be a price hike after the ruling.
Conclusion
There are three possible scenarios. The first one is Ripple straight-up winning the case, which would mean a lot of free publicity for Ripple, and more big players will invest in the company’s products. The second is the SEC outright winning the case, which is unlikely because then they’ll have to move against various other crypto projects. Also, they’re on thin ice with the Hinman speech. The director of an organization supporting a project, while they try to sue them, doesn’t reflect too well on the SEC.
The third and by far the most probable scenario is a settlement where Ripple pays some fine to put this behind them since it’s hampering their growth. This way the SEC will be able to at least save face and go about their business.
A complete collapse is very unlikely just like FTX’s collapse didn’t crash their token to zero. This reaffirms the adage that crypto is inherently unpredictable and you should invest according to your risk appetite. As for the Ripple vs SEC case, it’s drawing to a close and we’ll have a ruling soon enough.
