2 - 3 minute read
The ongoing legal dispute between Ripple Labs and the Securities and Exchange Commission (SEC) has investors in XRP, the sixth largest cryptocurrency by market capitalization, wondering what the future holds for the digital asset. The SEC has accused Ripple of offering unregistered securities in the form of XRP tokens, and the lawsuit has been ongoing for three years. Both parties have submitted final filings and are waiting for a decision.
SCENARIO A: THE SEC WINS
If the SEC is successful, it could levy a fine on Ripple Labs and demand that XRP be registered as a security. This would result in XRP being treated in the same manner as conventional securities, which could restrict its adoption and usage. The regulatory body has the authority to demand that Ripple register XRP as a security and levy a fine on the company. A judgment of this kind would have very negative repercussions for XRP, its investors, and the cryptocurrency sector as a whole.
SCENARIO B: RIPPLE WINS
If Ripple is able to defend itself against the SEC’s arguments, it could be a significant victory for the company and a positive sentiment for XRP. Ripple had some success during the hearings, but the final result of the lawsuit is still unknown. A favorable outcome could also set an important precedent for other cryptocurrencies, such as Bitcoin, and potentially open up the industry to more mainstream investors and businesses. David Reischer, CEO of Legal Advice, told Finbold that other countries’ regulators have ruled that cryptocurrency cannot be considered a security if there is no issuer, and that Ripple will likely prevail against the SEC’s claim that Ripple must register its tokens like a security. Andrew Pickett, a trial attorney based in Florida, added that the result of the lawsuit is being eagerly awaited across the sector, and that if Ripple is successful, it could help solidify XRP’s legality in the US market and benefit its price.