Whale addresses on the $XRP Ledger, which own between 100,000 and 10 million tokens (between $39,000 and $3.9 million), have quickly expanded their holdings over the previous five weeks, increasing from 16.7% to 18.3% of the cryptocurrency’s supply.
According to on-chain analytics company Santiment, XRP whales began adding to their holdings during the end of September and early October, when the cryptocurrency’s price began to rise as both the US Securities and Exchange Commission (SEC) and Ripple Labs began trying to settle their legal dispute.
In 2020, the SEC sued Ripple and two of its executives, saying that they sold unregistered securities when they distributed $1.3 billion in XRP coins. Ripple claims that XRP is not a security.
Ripple CEO Brad Garlinghouse said earlier this year that he expected the business will succeed in its legal fight with the government. Several important cryptocurrency organizations, including Coinbase and the Blockchain Association, have filed to promote Ripple in recent weeks.
Ripple’s attorneys said in a recent reply in support of a move for summary judgment that the regulator has failed to prove that any offer or sale of XRP constituted an investment contract under federal securities laws.
Ripple’s attorneys stated that even for transactions “including an exchange of money,” the SEC failed to “prove that buyers invested that money in a common company,” as the Howey test requires.
Analysts feel that XRP investors boosting their holdings might signal the beginning of a huge run for the cryptocurrency’s price, as a greater chunk of its supply exits the market and the SEC’s lawsuit concludes.
According to CryptoGlobe, cryptocurrency investment products with XRP exposure have witnessed considerable inflows as the SEC’s case against Ripple has become “increasingly unstable” in the eyes of investors.
The settlement of the case by Ripple might result in an XRP supply shock, which would probably lead to a price increase if demand remained constant while supply fell. According to Jeremy Hogan, a legal expert and XRP enthusiast who has been following the issue.
Hogan recently commented on a United States District Court judgment in favor of the SEC against the blockchain-based file-sharing network LBRY. The court ruled that LBRY violated securities regulations by selling its native LBC coins without first registering with the Securities and Exchange Commission. According to Hogan, the findings might be included in the SEC’s final brief in the Ripple case.