The Top Coins > Blog > Blockchain News > Latest News > XRP Price Surges Over 40% After the Hearing in SEC Case
                                             XRP Price Surges Over 40% After the Hearing in SEC Case
                                                                                      XRP Price Surges Over 40% After the Hearing in SEC Case

XRP Price Surges Over 40% After the Hearing in SEC Case

16 Apr 2021
Reading Time: 5 minutes

The recent Ripple (XRP) court case has put the cryptocurrency world in a frenzy. Eager investors have been closely watching the ruling, which will determine the immediate value of the coin. While governments have been actively cracking down on cryptocurrency in the past few months, the U.S. Securities and Exchange Commission (SEC) rarely gets involved, so all eyes and ears are awaiting the future of XRP. 

Ripple vs. SEC Lawsuit 

To understand what went on between Ripple and the SEC, it’s important to be familiar with security tokens. These are tokens that bridge blockchain technology and traditional stocks, essentially offering investors guaranteed future profits in the form of dividends, such as company shares. Security tokens that circulate in the U.S. are regulated by the Securities and Exchange Commission or the SEC. Naturally, if a company were to release an initial coin offering (ICO) for a security token, they’ll need to register with the SEC to legally do so. 

The conflict began when the SEC accused XRP, Ripple’s native token, of having an illegal ICO’s characteristics rather than a cryptocurrency. They argue that Ripple is security after comparison against the Howey Test from the U.S. Supreme Court. However, Ripple argued that XRP is instead being sold as a commodity and doesn’t need to comply with the SEC’s regulations. Many also believe that the Howey Test is far too outdated and is unable to judge contemporary innovations.

This case is important to investors as it will determine XRP’s investment potential and become the forefront of the possible future of lawsuits that await the shaky cryptocurrency scene. 

Ripple (XRP) currently ranks fourth in the cryptocurrency chart by market cap, with a value that trends between $1.6 to $1.7––a massive increase from last year’s unimpressive $0.1. The coin remained quiet throughout most of the recent bullish market, but a series of wins in its court ruling gave XRP a much-needed push above the $1 margin. 

Another Win for XRP 

On April 6th, the court, led by Judge Sarah Netburn, rejected the SEC’s move to access eight years of Ripple’s founders’ personal information, including banking records, judging that they were not necessary for the needs of the case. This signaled a massive win for Ripple, driving coin prices upward immediately. Netburn has also acknowledged the complexity of the case––in that it would greatly affect not only Ripple but the cryptocurrency industry as a whole. 

XRP Holders Against SEC 

Investors didn’t sit still throughout the first few hearings, petitioning to intervene in the XRP SEC ruling, arguing that the legal battle also involved people who have invested money into the company’s assets. After determining their relevance in the case, District Judge Analisa Torres complied, allowing their intervention in the case. 

However, the SEC wholly disapproved, believing that the involvement of thousands of people would only result in a flurry of complaints and muddy up the situation. Despite their complaint, the court has continued to allow investors’ intervention. 

What if XRP Wins the Lawsuit? 

Ripple is expected to gain a massive boost in investor support once it scores a full win in the XRP court case. Experts are foreshadowing a spike in value, following the 12% increase after winning its second filing. While the coin still enjoys support in parts of Asia, it has yet to penetrate the U.S. market at large––a feat that will become possible once it gets out of hot water. For Ripple to win the case, they need to prove that XRP is, in fact, a cryptocurrency that primarily functions as a currency, and secondarily functions as a utility. 

For now, the industry is closely watching the lawsuit, and the court is also treading carefully, knowing full well that XRP’s future will significantly impact cryptocurrency. 

Leave a Reply

Add comment