After years of legal disputes, the U.S. Securities and Exchange Commission (SEC) has decided to withdraw its lawsuit against Ripple, marking a significant moment in the cryptocurrency landscape. This development has fueled a notable surge in the price of XRP, with the token’s value rising over 10%. Investors are responding positively to the end of a prolonged uncertainty that has shadowed XRP since the lawsuit was first filed in December 2020.
As the news broke, XRP was trading around $2.53, reflecting increases of 12% for the day and 18% for the week. The cryptocurrency now ranks third in market capitalization, surpassing $148 billion.
The lawsuit has been a pivotal moment in the crypto sector, given the role Ripple plays as a digital payment network. Founded in 2012, Ripple offers both a disbursement platform and a cryptocurrency known as XRP. Although it trails behind Bitcoin and Ethereum in market cap, it remains a key player due to its hybrid open-source nature and peer-to-peer decentralized framework that can accommodate various currencies.
The SEC’s pursuit of Ripple began with allegations that it raised $1.3 billion through the unregistered sale of XRP, categorizing the digital asset as a security. However, a critical ruling in 2023 by U.S. Judge Analisa Torres stated that Ripple had indeed violated securities laws in institutional sales, but found that sales to the general public did not violate any regulations. While the SEC initially planned to appeal this decision, the latest news of the lawsuit’s withdrawal effectively concludes the contentious legal battle.
The SEC’s recent decision also appears to align with a broader reassessment of its regulatory approach, as investigations into other major cryptocurrency firms have also been scaled back. This shift may connect with recent leadership changes within the agency.
With the lawsuit officially laid to rest, speculation is growing about the potential for an XRP-based exchange-traded fund (ETF). The resolution of this legal issue might empower Ripple to focus on expanding its business, diverting resources from courtroom battles toward growth strategies. The surge in XRP trading volumes—up 97% to $7 billion—illustrates a reinvigorated investor confidence in the aftermath of the legal victory.
What remains to be seen is how Ripple will position itself in a rapidly evolving market post-lawsuit and whether XRP can attain heightened popularity akin to Bitcoin, which has undeniably transformed the landscape of digital assets and blockchain technology. While the future of XRP looks brighter following the SEC’s withdrawal, its trajectory in the competitive cryptocurrency market is still open to speculation.