Despite Winning the Court Battle, XRP Is Losing Ground

Ripple may have won the courtroom battle, but XRP is losing ground in the market. The SEC dropping its appeal should have been a game-changer

The U.S. Securities and Exchange Commission (SEC) will not appeal a court ruling that largely cleared Ripple Labs of charges of selling unregistered securities, according to a report by The Block.

The decision, which was first reported by Bloomberg, comes after the agency had previously indicated its intention to appeal.

The case, which began in 2020, has been closely watched by the crypto industry. It centers around XRP, a cryptocurrency created by Ripple.

The SEC’s complaint alleged that Ripple’s $7.1 billion programmatic sale of XRP via secondary exchanges like Coinbase and Kraken over a seven-year period violated securities laws.

However, U.S. District Judge Analisa Torres ruled last December that these sales were not securities transactions.

Instead, the agency’s claim that Ripple’s direct sales of XRP to institutional investors were securities violations was sustained, leading to a $125 million payout from Ripple to settle the case.

The judge’s ruling also had implications for the potential approval of an XRP ETF.

Experts say that the case’s resolution is crucial for the industry as it brings much-needed clarity to crypto regulation in the U.S.

“The Ripple case progressed further than other dropped cases, such as those against Coinbase and Kraken, where the SEC declined to pursue appeals of lower court rulings that no federal securities law was broken,” said Harold Baker, a former federal judge and partner at Baker McKenzie.

“The fact that the agency is now forgoing an appeal in the Ripple case is noteworthy.”

Despite the legal victory, XRP’s market performance has been lackluster. On-chain data from Santiment reveals a nearly 70% drop in daily active addresses on the token’s network over the past week.

This inactivity could be attributed to the summer lull in trading activity and coincides with an 11% price decline for the token.

If traders continue to exit their positions, XRP could face further downside momentum, especially without any new utility additions or fundamental catalysts to attract buyers.output:

The U.S. Securities and Exchange Commission (SEC) has decided not to appeal a court ruling that largely cleared Ripple Labs of charges of selling unregistered securities, according to The Block.

The news outlet reported on Tuesday that the agency’s decision was confirmed by two people familiar with the matter.

After the judge’s ruling last December, the SEC had indicated its intention to appeal.

However, the agency opted not to pursue this path further.

The case, which began in 2020, has been closely monitored by the cryptocurrency industry.

The SEC’s complaint focused on Ripple’s programmatic sale of XRP via secondary exchanges like Coinbase and Kraken, which the agency claimed violated securities laws.

Judge Analisa Torres ruled that these sales did not constitute securities transactions.

Instead, the court sustained the agency’s claim that Ripple’s direct sales of XRP to institutional investors were securities violations, leading to a $125 million payout from Ripple to settle the case.

The judge’s ruling also had implications for the possibility of an XRP ETF being approved.

Experts have highlighted the significance of the case’s resolution for the industry as it brings much-needed clarity to crypto regulation in the U.S.

“The Ripple case progressed further than other dropped cases, such as those against Coinbase and Kraken, where the SEC declined to pursue appeals of lower court rulings that no federal securities law was broken,” said Harold Baker, a former federal judge and partner at Baker McKenzie.

“The fact that the agency is now forgoing an area of appeal in the Ripple case is interesting.”

Despite the legal victory, XRP’s market performance has been lackluster. On-chain data from Santiment shows a steep decline in daily active addresses on the token’s network.

Over the past week alone, there has been nearly a 70% drop in active addresses, which could indicate lower liquidity and reduced speculative interest, potentially exacerbating the token’s recent 11% price slump.

If traders continue to exit their positions en masse and there are no new utility additions or fundamental catalysts to attract buyers, XRP could face further downside momentum.