20 September 2021
Ripple (XRP) has been in the news for weeks now and has faced an immense amount of pressure in the market. The cryptocurrency which was once listed as the top cryptocurrency and placed a secured position with Bitcoin, and Ethereum followed by XRP as the third-largest cryptocurrency, is now sitting on the current price of $0.37. The top cryptocurrencies are swinging on their all-time-highs while the competitors that placed the later position have now crossed Ripple.
The lawsuit by the SEC - U.S. Securities and Exchange Commission brought uncertainty about the cryptocurrency that led XRP to fall. The lawsuit alleges XRP - a digital asset of Ripple Labs Inc. to be as security than a currency and hence should be registered under the approval of the U.S. securities regulator. The complaint filed against Ripple alleges as “unregistered securities offering”. The lawsuit alleges Ripple to have raised $1.3 billion since 2013 with reference to unregistered securities offerings.
While on the other note, Ripple has denied the claims stating that XRP is just a currency like the other ones in the crypto market.
However, the lawsuit on Ripple resulted in price tumble as crypto traders are not certain about what to expect from the currency. Many cryptocurrency exchanges such as OKCoin, Bitstamp, Coinbase and Bittrex have either suspended or delisted the cryptocurrency.
Siddharth Menon, the co-founder and chief operating officer of WazirX said, “Ripple (XRP) is one of the most popular cryptocurrencies. It has also been among the top traded tokens on WazirX. SEC’s lawsuit against Ripple is shocking. Given the uncertainty of this situation, we will continue monitoring the lawsuit development and then take the necessary steps”.
Also Read, Evolutionary Regulations of Cryptocurrency
While the chief executive of Bitbns, Gaurav Dahake said, “Cryptos like Bitcoin and Ethereum can be mined by anyone. There is no issuer and owner. This was never the case with XRP. Ripple Labs owned 98% of it and issued a little bit every year. The company set the supply (100 billion tokens). This makes it more like a security than a cryptocurrency.”
Coppola on the other hand said, "Any exchange that allows trading in XRP is potentially breaking the law, so exchanges are bound to delist it.”
It is likely the same precariousness for various cryptocurrency exchanges and does not seem to be a heyday for Ripple unless the lawsuit is resolved.
The price of Ripple has faced a serious downtime as it has seemed to move towards a bearish environment as the currency is below its 25-day and 50-day of moving averages. XRP is the like the core for Ripple that accounts for major revenue and without that Ripple will apparently face major downtime for its operations.
Also in the recent news, XRP value surged a 56% through a co-ordinated buying spree by the traders, a group that was Telegram-based named Buy & Hold XRP. However, the pump and dump method is pretty classic and common in the industry.
Also Read, Cryptocurrency Delisting On An Exchange
The chief executive of Ripple, Brad Garlinghouse stated, "The SEC is completely wrong on the facts and the law and we are confident we will ultimately prevail before a neutral fact-finder," "The SEC has permitted XRP to function as a currency for over eight years, and we question the motivation for bringing this action just days before the change in administration."
As per the analysts, the U.S. Office of the Comptroller of the Currency’s (O.C.C.) had enabled the U.S. banks to utilize public blockchain and dollar-based stablecoins as an infrastructure to make settlements in the financial system that seems to be a commending for XRP. However, XRP will have to make developments, advancements and be strategical to be back in the game.
Bitcoin revolutionized the financial system and open a market that led to opportunities for cryptocurrencies that exist today. Ripple too is one such platform for a decentralized payment network that works on centralized nodes. It aims to approach financial institutions and utilize blockchain technology to make cross-border payments efficient. XRP was launched in the year 2012 and the December 22nd, 2020 news has significantly affected the cryptocurrency. It would not be an exaggeration to state that positive news barely moves a needle while a negative one can move mountains. So whether it is the beginning of the end or otherwise is based completely on how the lawsuit unveils for Ripple and the strategic plan the platform executes.