Ripple Claims That XRP is Not a Security
Over the past two years, SEC and Ripple have been going back and forth in court. In 2020, the Securities and Exchange Commission filed a lawsuit against Ripple, a US-registered company. They filed this lawsuit with the claim that Ripple was unlawfully selling XRP. According to SEC, XRP is unregistered security. However, Ripple thinks otherwise.
While the trial continues, SEC consistently fails to provide factual information or documentation that Ripple is in the wrong. On the other side, many unethical events were uncovered regarding Ripple. Some leaks suggest that officials of Ripple were illegally selling XRP at lower prices, hence, manipulating the market. The more the trial continued, the more dramatic it became. Both sides, SEC and Ripple, got their wins and losses, but nothing was enough to conclude the trial.
Just recently, Ripple once again stated that XRP is not a security. This time, they based their argument on the fact that XRP owners have no right or contract over the company. As logical as this is, not everybody agrees, especially the SEC. Legally speaking, however, no XRP owner has a so-called “investment contract” that binds them to the investment and gives them rights as investors.
On the 18th of September, both parties submitted documents for something called a summary judgment. For your information, a summary judgment indicates that both sides want to prevent the legal action from turning into a full trial. In essence, a summary judgment request by both sides means that both sides want to surrender. These “white flags” might be the best development during these trials, though. After SEC sued Ripple, crypto-related companies made lots of changes to their policies out of fear. Moreover, the cryptocurrency market was put under pressure by regulators.
These developments will likely impact the price of XRP, especially in the long run. Until today, there has been a huge FUD regarding the future of XRP. The FUD around XRP is so high that the token price did not even reach the previous all-time high the token hit back in January 2018. Even though Ripple faced a huge lawsuit, the price of XRP did not crash as expected. XRP indeed dipped, but it dipped exactly when the whole market dipped. With this lawsuit ending, people speculate that XRP may come back stronger than ever. Moreover, the solution that XRP offers for financial institutions can help these institutions overcome the current economic crisis.