Back in 2020, it was all about the entire Blockchain Industry Vs US Government. It was not just about XRP fighting the case, it was the whole cryptocurrency industry fighting for their existence.
How it all started for XRP?
In December 2020, a major move stunned the whole crypto and blockchain world. The Securities and Exchange Commission (SEC) pulled Ripple Labs into the courts of law. Including Ripple’s founder and executive chairman Chris Larsen, CEO Brad Garlinghouse. The accusation was that the company raised $1.3 billion in unregistered securities. The SEC further complains that XRP is not a currency but security and hence is subject to strict securities laws.
This event in Ripple’s entire history caused a major downfall. XRP was de-listed by many top exchanges, its price soared. Its market cap went down due to a heavy sell-off.
The company is fighting for a larger principleStuart Alderoty, General Counsel for Ripple
“We’re fighting not only to get to the right result for Ripple. We’re fighting to get the right result for the industry. The industry should not be left to guess which tokens will show up one day in the crosshairs of the SEC and which tokens won’t.” said the General Counsel in an interview.
What damage has it caused?
Each day this lawsuit continues, it’s harmful to Ripple. The value of its token XRP has dropped drastically and over 50 exchanges have suspended trading or delisted XRP. XRP has lost 75% of its value and is unlikely to recover until this lawsuit concludes or vice versa. It cannot move forward to an IPO until this ends.
What’s the future?
It’s proved that almost 96% of the SEC cases conclude via settlement before a trial. It seems to be a likely outcome since there are a lot of negative effects on Ripple and XRP. However, SEC has been stalling in multiple ways to weaken Ripple’s position. But it is highly concerned about the problems that would create for the Howie Test. It determines what can be considered as a security.
What if Ripple loses?
If XRP is a security, then Ethereum falls under scrutiny next and in fact any other token. Moreover, the US as a nation will exist with such results. It will not be seen as a leader in the crypto industry.
Instead, all investments will find homes in other stable markets except the US.
Let’s watch out for what the future holds, all twists and turns ahead until we reach the end.