XRP – the cryptocurrency of Ripple – has shot up in price and is now the fourth largest digital asset, having beaten out BNB, the digital currency of Binance which is the world’s largest and most popular crypto exchange.
Ripple Currency XRP is Surging!
XRP has been involved in a huge legal battle with the Securities and Exchange Commission (SEC). Ripple had a suit filed against it back in 2020 by the financial agency, which swore up and down that the company was ignoring securities laws by failing to register the asset. After three long years, a judge handed a partial win to Ripple, claiming XRP was not a security on its face.
Whatever that means, the crypto community is taking this as a huge win for the firm, as XRP has now jumped in price like it never has before. It also makes sense that the asset would jump ahead of BNB, as its parent company has been faced with serious repercussions following the initiation of a lawsuit against it and its chief executive Changpeng Zhao for allegedly commingling both customer and company funds.
Also, the ruling now opens the door for XRP to again be listed on centralized exchanges after many of them delisted the asset following the pushing of the suit.
There is a second side to this case, however. While it’s been deemed XRP is not a threat to present securities regulations, it was deemed by the court that the company may have been in violation of certain laws when it decided to sell more than $700 million worth of the asset in an initial coin offering (ICO). Townsend Lansing – the head of product at Coin Shares – offered his take on the situation. He said:
The court has found Ripple to be in violation of securities laws, specifically in relation to direct sales to institutional investors. As such, XRP is not only deemed a security, but questions have arisen regarding the legality of its offering. [Regarding] these sales, the court has confirmed that the law was indeed violated, marking a considerable victory for the Securities and Exchange Commission (SEC) and setting a precedent for its legal actions against other cryptocurrencies. It is important to note that institutional investors who purchased directly from Ripple may find themselves subject to class-action litigation as potential underwriters. This is an area to watch closely, especially if big-name venture capitalists were involved.
What Will Happen with Other Lawsuits?
Still, Ripple has walked away relatively unscathed from this event, and its revolutionary case involving the SEC will likely set a precedent for the future lawsuits the agency has coming against both Binance and Coinbase.
Each company is reported to have been in violation of rules the SEC instilled, but with Ripple’s victory, some see hope for the institutions.