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Ripple Effect: Coin making waves in the market and court


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Ripple is making waves in the market and courtroom despite facing a hazy future. - Photo: Shutterstock

Ripple is making waves in the market and courtroom despite facing a hazy future.

Ripple Labs’ coin (XRP) is at the centre of a 2020 lawsuit between the company and the US Securities and Exchange Commission (SEC) that is now proceeding before the courts. But XRP has made price gains recently.

It is one of a number of legal cases the crypto sector now finds itself in. 

The cryptocurrency was up about 7% when traditional markets closed Thursday in North America, according to CoinMarketCap. XRP was also in the green for the most recent seven-day period.

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XRP To USD

Important court win

Ultimately, the case could determine whether XRP and, potentially, all other digital coins are regulated as securities in the US, one of the world’s largest markets.

Ripple scored an important court victory in mid-July as US Magistrate Judge Sarah Netburn denied the SEC's motion to prevent one of its former officials' views on ether (ETH), the cryptocurrency backed by the Ethereum blockchain, from being used as evidence.

UNI to USD

Securities offered: SEC

The former official, William Hinman, had contended in 2018 that fundraising efforts related to the creation of ether (ETH), which is backed by the Ethereum blockchain, did not constitute securities transactions.

In 2020, the SEC sued Ripple Labs, and its CEO Brad Garlinghouse and co-founder Christian Larsen on allegations that the company raised more than $1.3bn (£1.06bn) “through an unregistered, ongoing digital asset securities offering.”

RUNE to USD

 

Investors show enthusiasm

Ripple investors appear to be enthused by comments that Garlinghouse made at the Collision 2022 event in Toronto that are just now coming under widespread public scrutiny.

DOGE/USD

0.06 Price
+0.360% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 21:00 (UTC)
Spread 0.0008739

XRP/USD

0.49 Price
+1.890% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 21:00 (UTC)
Spread 0.00600

BTS/BTC

0.00 Price
0.000% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 21:00 (UTC)
Spread 0.00000002

BTC/USD

19,464.75 Price
-0.340% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 21:00 (UTC)
Spread 60.00

During an interview with Axios, Garlinghouse noted that a loss in the lawsuit would only affect XRP in the US, and investors in the country are already prevented from trading the coin on some platforms.

Coinbase delisted XRP

In 2021, Coinbase, one of the world’s largest crypto exchanges delisted Ripple as a result of the SEC’s lawsuit against Ripple. Investors appeared to support Garlinghouse’s prediction that Ripple will win the case.

“I’m betting that because I think the facts are on our side,” he told Axios. “I’m betting that because the law is on our side.”

He said the SEC has “massively overstepped” and is trying to take “jurisdictional ownership” of XRP.

SEC chief Gary Gensler has made it clear that he wants all cryptocurrencies to be registered as securities. Many observers are monitoring the case because they view it as one that could affect the entire crypto industry.

Ripple’s gain Thursday coincided with a market-wide upswing.

Class action against the SEC

SEC chair Gensler was previously feared by major financial institutions for his hardline approach to bank regulatory form in his previous role as head of the Commodity Futures Trading Commission.

Retail investors however, seem less cowed. At the start of August over 70,000 Ripple investors signed against the SEC according to a lawyer representing XRP coin holders.


John Deaton, who is heading the class action claims that he has signed up people from all 50 US states and US territories and from a total of 141 countries.

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