Ripple, a San Francisco-based fintech startup, has been battling the US Securities and Exchange Commission for selling unregistered securities (XRP) for almost 11 months. Although Ripple has consistently asserted that there was no wrongdoing, the SEC continues to make strong allegations.
Ripple Expect Case to Close Next Year
In an interview on November 22, Ripple CEO Brad Garlinghouse speaking to CNBC’s Dan Murphy said that they are “making good progress in this situation.” Garlinghouse also expects the case to close next year. However, in this lengthy legal battle, the tide appears to be turning to support Ripple.
We’re seeing pretty good progress despite a slow-moving judicial process. Clearly, we’re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications.
Ripple’s XRP has long been one of the most powerful cryptocurrencies and ranks third after Bitcoin (BTC) and Ethereum (ETH). However, since the fallout with the US Securities and Exchange Commission, XRP has moved mostly sideways and remained above $1. Currently, XRP is the seventh-largest cryptocurrency by market capitalization after being outperformed by more powerful digital assets.
In this case, if there are positive results, then we can expect a strong performance from XRP. On the other hand, Ripple technology has gained market recognition from banks and other financial services companies. Its RippleNet technology harnesses the power of blockchain to enable instant cross-border payments. Similarly, Ripple also uses XRP to sell other products for instant cross-border payments and on-demand liquidity.
The Dispute Between Ripple and The Regulator
Late last year, on December 28, 2020, outgoing SEC Chairman Jay Clayton filed a lawsuit against Ripple, accusing the company of selling XRP as illegal securities. The US Securities and Exchange Commission also cited concerns about the relationship between Ripple and XRP.
As mentioned earlier, the Securities Commission argued that during the 2013 ICO, the company and its founders sold $1.3 billion worth of XRP as illicit securities. However, each time Ripple defended its position, saying that XRP was not a security.
Garlinghouse has also fought against the US Securities and Exchange Commission in the past because of unclear regulatory frameworks for the use of crypto. At some point, the company also considered moving its base from the United States to other cryptocurrency-friendly countries.
Garlinghouse also stated that countries like the United Arab Emirates, Singapore, Japan and Switzerland have consistently shown “leadership” in regulating cryptocurrencies. On the other hand, he also criticized China and India for suppressing industry. Recently, Coinbase CEO Brian Armstrong also stated that the Ripple case is progressing better than expected.