The XRP Saga: A Deep Dive into the Yearlong Dispute and Its Implications for the Crypto Market

The rise of Bitcoin in 2009 rang in a new era - the era of digital currencies. Greeted by tech-driven investors as the “next big thing”, crypto investing raised concerns amongst regulators

The yearlong legal battle between the US Securities and Exchange Commission (SEC) and Ripple Labs over the XRP token status has finally reached a partial resolution.

In a recent development, a federal judge in the Southern District of New York has ruled that XRP is not a security when it is traded through digital asset exchanges, such as Coinbase or Binance. However, the token will be classified as a security if it is offered to institutional investors, such as pension funds or hedge funds.

This ruling stems from the SEC's lawsuit against Ripple Labs, filed in 2020, which alleged that the company had defrauded institutional investors by selling its XRP tokens as unregistered securities. The SEC sought to impose a fine of $2 billion on Ripple Labs for these actions.

In response to this news, XRP's price surged 73% on 13 July 2023, as traders reacted positively to the partial victory for Ripple Labs in this case.

However, the SEC continued to pursue Ripple Labs further, seeking to discourage the company to stop offering XRP on the grounds of the token being a security. This meant that XRP should have fallen under a different regulatory regime, in line with the 1933 Act.

The SEC's pursuit of Ripple Labs has been a major point of contention within the cryptocurrency community. Many argue that XRP's characteristics, such as its fast transaction times and low fees, make it more suitable for use as a currency rather than an investment vehicle.

As a result, many crypto enthusiasts believe that the SEC's classification of XRP as a security is overly restrictive and could hinder its adoption as a واسعة النطاق medium of exchange.

In other news, a federal judge has fined the XRP issuer $125 million for allegedly defrauding institutional investors by selling its tokens as unregistered securities, falling short of the $2 billion penalty sought by the SEC.

A day before Bitwise Asset Management Inc. submitted a filing to the SEC for an ETF investing directly in XRP, according to a Bloomberg report, the SEC filed an appeal with the Second Circuit Court of Appeals against the ruling that XRP is not a security on exchanges. Following the news, XRP plummeted more than 8%.

Yet, there is light at the end of the XRP tunnel. With the US President-elect Donald Trump's victory against Democratic Vice President Kamala Harris, the vilified cryptocurrency has seen a spectacular price upsurge.

As crypto investors priced in a more relaxed crypto regulatory approach under the new Trump administration, XRP hit a record high at $2.90 on 3 December, before pulling back to $2.59 (close).

With the nomination of Paul Atkins to head the SEC, cryptocurrencies could enter a new era. The President-elect's friendly stance towards digital assets has broadly had a positive impact on the blockchain-driven market.

Meanwhile, crypto industry insiders remain positive about the future, which could potentially witness further crypto upswings, with XRP likely to be among the top gainers.