Most major currencies and tokens have been losing money in the crypto markets during the last week. Yet, one digital asset is on the rise: XRP. According to CoinGecko, the sixth largest cryptocurrency by market capitalization is up approximately 21.6% in the last seven days and is presently selling for $0.54. And it isn’t just this week: it has risen 55% from the beginning of January in the first quarter of 2023.
What is the reason for XRP’s success? The asset’s price increase is due in part to investor confidence that the token’s founders will prevail in a legal battle against the United States. According to experts, the Securities and Exchange Commission.
Ripple Labs, which was founded to enable banks and other financial organizations move money quickly and cheaply, is still fighting a 2020 lawsuit with the United States. The SEC is the Securities and Exchange Commission.
The SEC, which is presently cracking down on the cryptocurrency business like never before, claims Ripple Labs and two of its co-founders defrauded investors by raising $1.3 billion in unregistered securities sales since 2013. According to Gary DeWaal, senior attorney at New York law firm Katten Muchin Rosenman LLP, the XRP surge is “based on hope.”
He went on to say that the Ripple Labs team had presented a “fair notice defense” in its filings, claiming that they couldn’t have realized XRP would be considered a security.
Ripple Labs paid the Department of Justice $700,000 to settle a criminal probe in 2015. Ripple Labs formally acknowledged that XRP was a virtual currency as part of this settlement (not a security.)
This, according to DeWaal, is “completely incongruous” with the SEC’s argument years later that the asset is a security—and may thus tip the scales in their favor. But, he stressed that no one can foresee the conclusion of a case. When investors were speculating, he stated that if Ripple Labs won, it would be momentous for the crypto sector.
Under the chairmanship of Gary Gensler, the SEC has started its heaviest attack on the crypto sector in years. The head of the regulator intends to crack down on any coins and tokens, as well as the companies that trade them, that he believes are unregistered securities.
He has already fined big US cryptocurrency companies this year, including exchange Kraken, as well as Genesis and Gemini. The government sent a Wells Notice to America’s largest cryptocurrency exchange, Coinbase, last week, indicating that enforcement against the San Francisco-based exchange is imminent.
