Ripple is mainly known for its payment protocol which bears similarities to a payment system, money transfer network, and currency exchange.
One of the unique characteristics of the Ripple protocol is its diversity. It is used in a financial institution because it accepts digital currencies, fiat money, and commodities. Its transaction speed is fast along with its low transaction fees. Compared to other cryptocurrencies, XRP is an open-source built on an XPR ledger database, not blockchain protocol.
In addition, the Ripple network does not run work with a proof-of-work (PoW) or proof-of-stake (PoS) system. It builds its transactions on a consensus protocol. The consensus protocol is used to authenticate account balances and trades on the system. It provides integrity and trust among traders.
XRP vs SEC lawsuit Recap
On December 22, 2020, The Securities and Exchange Commission (SEC) filed a complaint in a federal district court in Manhattan, Washington DC. It was against the defendants of the charges, Ripple Labs inc. And two of its executives, with violating the registration provisions of the Securities Act of 1933. The complaint seeks injunctive relief, disgorgement with prejudgment interest, and civil penalties.
In the charge against Ripple Labs Inc., two of its security holders, an executive, were accused of raising over $1.3 billion via the unregistered, ongoing digital asset securities offering. According to the information supplied in the complaint, it alleges that at the beginning of 2013, Ripple raised funds by selling digital assets known as XRP in an unregistered securities offering. The sale was made to investors in the US and worldwide.
Ripple was accused of distributing billions of XRP as payment for labor and market-making services. In using XPR sales to finance the company’s business, Larsen and Garlinghouse were charged with deficits. SEC alleged the pair made unregistered personal sales of XRP totaling approximately $60e, which the defendants failed to register as their offers and deals of XRP. All these were violations of the rules surrounding the registration provisions of the federal securities laws.
The Director of the SEC’s Enforcement Division, Stephanie Avakian, said, “Issuers seeking the benefits of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with the federal securities laws that require registration of offerings unless an exemption from registration applies.”
In the lawsuit, external documents on other cryptos may change tides of the case between SEC vs Ripple on crypto.
The court is yet to make its final verdict on the case.
The action of the lawsuit at SEC had a side effect on the market value of XRP. It plummeted when over 40 exchange platforms delisted and suspended the trade of XRP. In addition, the currency lost 75% of its market value.
Why Is XRP Likely to Win?
As the case is drawing close, experts have come up with several deductions, most of which are tilting in favor of XRP. In most of the analyses, XRP is most likely to come out victorious at the end of the lawsuit case.
Currently, the SEC is in a challenging position. It is forced to address all XRP sales contracts. It was the directive of Judge Netburn, “It either has to admit there is nothing in writing that forms an investment contract and therefore admit that the case is circumstantial, or it can go through every contract and try and find something in the contract that somehow ties Ripple to people who bought XRP on Coinbase last year.”
Firstly, according to a legal expert, the SEC has a slim chance of winning the legal battle because it has very little evidence and witnesses to the case.
Secondly, Ripple gained the upper hand when they discovered email evidence that the speech given by Bill Hinman, the former director of the SEC’s Division of Corporate Finance, in a news conference in 2018 was not only his personal opinion but rather, an SEC’s policy. In the news conference, he said that Ethereum isn’t a security. After the speech was made, it hurt the price of Ethereum and also caused debates among crypto enthusiasts.
Since it’s the company policy, according to evidence from an email, Ripple’s legal team saw an entry to change the tides of the case by requesting to release SEC’s privilege log on crypto trading.
In addition, Attorney Jeremy Hogan pointed out the contradictory action of the SEC. He said, “An email was sent by the SEC to a third party telling them to use the Hinman speech to analyze digital assets. The speech was just a personal opinion of the SEC. I understand how – it’s the SEC that needs clarification!”
XRP Relisting on Coinbase?
Earlier this year, Coinbase suspended the trading of XRP and didn’t point out a specific time the trading service for Ripple would be back online. Coinbase officially dropped the news to address XRP trading which was stated as, “Given the SEC’s recent action against Ripple, trading on our XRP order books has been suspended in all regions. You’re still able to deposit and withdraw XRP. While XRP funds will remain safely stored in your account after the trading suspension, you will not be able to buy, sell, or convert. There will be no impact to Coinbase Custody or Coinbase Wallet at this time. Learn more about the Ripple SEC lawsuit.”
On September 10, XRP trading pairs were visible on the Coinbase Pro mobile application, which excited the XPR community. The excitement was visual as there was a 13% increment in the price of XRP and the trading volume surged.
The excitement was short-lived when Coinbase debunked the news of the relisting, stating that their stand didn’t change. Hence, XPR hasn’t been relisted back on the exchange.
This update caused a massive loss of 10% out of the 13% that increased, canceling out all trace of profit.
Most Crypto users have been encouraging Coinbase to side with XPR since they have continuously received a lawsuit from securities regulators. But Coinbase has decided to show solidarity to the SEC instead.
XRP Price Analysis (XRP could overtake his past ATH)
XRP is currently ranked #7 in Coinmarketcap with a live market cap of over $51 billion. It is presently trading for $1.10 with over $4 billion 24 hours trading volume. The coin is available on the following top exchanges; Binance and FTX.
XRP Price Prediction 2021
Since the past few days, XRP has been performing remarkably well. If it keeps up with this appearance, XRP is in league with bulls, like Bitcoin and Ethereum, by overtaking its past ATH of $3.56 resistance and leveling up. The coin’s digital asset is capped at 100,000,000,000 XRP as its maximum supply.
The coin experienced its All-time high when they partnered with MoneyGram and Santander, making them a growing big player among the financial institutions.
XRP Price Prediction 2022
If XRP keeps up with its bullish trend, XRP is predicted to reach $15 by the end of 2022. In addition, if there’s no alteration in the movement, at the end of 2022, the price would have grown to $25.
To catch up with the latest developments in the crypto world, Ripple is also exploring the non-fungible token (NFT) universe. Ripple developers have invested 250 million US dollars to make efforts and create a pathway.
Accordingly, the InvestingCube protocol is created for artists, bands, agencies, and markets who intend to make use of XRP Ledger technology.
Written by: Narender Charan