While Bitcoin and Dogecoin watchers enjoy the ebbs and flows of Elon Musk cosigns, and while LINK marines beat their chests boasting of the highest growth of 2020, XRP’s story has largely been a nail biting courtroom drama.
On December 21, 2020, the US Securities and Exchange Commission entered legal proceedings against Ripple, alleging they had sold XRP as an unregistered security.
Amidst the legal and semantic hair-splitting, multiple crypto exchanges delisted XRP. To make matters worse, its market capitalization subsequently plummeted by 63%, or $16 million, in a crash that proved ruinous for many investors.
The first signs of hope came when XRP’s price rebounded by 30% seven days into the new year. In the last 24 hours, XRP reached highs of $0.51 dollars at 16:27 UTC before dipping to a low of $0.39 forty minutes later. In all, XRP shot up 40% today, continuing a week’s growth of about 50%.
Larry Cermak, director of research at The Block, remains skeptical. He believes XRP could be having something of a GameStop moment. He said that XRP could be the victim of a pump n' dump.
XRP is being pumped by basically a pump and dump Telegram group and is up more than 50% in the last 45 minutes.
— Larry Cermak (@lawmaster) January 30, 2021
Whatever is happening, the surges come immediately after Ripple made a filing on Friday to rebut the SEC’s allegations. In the filing, Ripple pointed out how the SEC overlooked XRP’s value as a utility. As the filing explains:
“The functionality and liquidity of XRP are wholly incompatible with securities regulation. To require XRP’s registration as a security is to impair its main utility.”
Ripple's big lawsuit
In the 93-page filing, Ripple pointed out that XRP is open source and that its price has roughly tracked Bitcoin’s and Ethereum’s. In addition, Ripple has also filed a Freedom of Information request from the SEC to ask them how they determined that Bitcoin and Ethereum are not securities.
"The SEC is bringing this action 8 years after XRP was created. How are companies meant to have regulatory clarity when the SEC takes 8 years to bring an action? Also, Ripple rightly points out that by ignoring Ethereum, which clearly had an unlawful securities offering, the SEC is arbitrarily picking the winners and losers. It's clearly unfair and I do think Congress needs to step in here," Dean Steinbeck, general counsel and COO at Horizen Lab, told Decrypt.
"If we've learned anything from previous SEC enforcement actions, the big players like Ripple will get off with a slap on the wrist relative to the size of their $1.3 billion unregistered offering," said Steinbeck.
One thing remains certain: Ripple is determined to fight back tooth and nail for XRP.
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