After more than four years of intense legal disputes, the U.S. Securities and Exchange Commission (SEC) has officially decided to drop its lawsuit against Ripple. This announcement has significantly boosted the value of XRP, leading to over a 10% rise as investors celebrated the long-awaited resolution that had cast uncertainty over the token’s future since 2020.
At the time of the news breaking, XRP was trading at $2.53, marking a 12% increase on the daily charts and an 18% jump on a weekly basis. Currently, XRP holds the 3rd position in the cryptocurrency market, with a market capitalization exceeding $148 billion.
This lawsuit, which initially shook the cryptocurrency ecosystem, was initiated by the SEC in December 2020. The regulatory body accused Ripple of raising $1.3 billion through sales of XRP that it classified as an unregistered security. A pivotal moment occurred in 2023 when U.S. Judge Analisa Torres determined that while Ripple had violated securities laws through institutional sales, its programmatic sales to retail investors did not break any regulations. This decision was perceived as a significant, albeit partial, victory for Ripple, prompting the SEC to file a notice of appeal. However, the recent announcement indicates that the SEC is abandoning its appeal, effectively ending the case.
This withdrawal from the lawsuit aligns with broader changes in regulatory enforcement within the SEC. Recently, the Commission has also stepped back from investigating other prominent crypto companies such as Coinbase and Kraken. The leadership changes within the SEC, including the departure of former Chair Gary Gensler and the nomination of Paul Atkins, seem to have influenced the agency’s shift in approach.
The conclusion of the lawsuit not only alleviates long-standing concerns among investors but also provokes discussions about the potential creation of an XRP-based exchange-traded fund (ETF). This speculation arises as Ripple’s CEO has suggested that the lawsuit was less about protecting investors and more about hindering growth in the cryptocurrency sector.
In the aftermath of the announcement regarding the lawsuit’s dismissal, XRP’s trading volume surged to reflect newfound investor confidence, increasing by 97% to reach $7 billion. Ripple’s victory could fortify its position in the market, allowing the company to prioritize expansion and innovation over ongoing legal challenges. Nevertheless, it remains uncertain whether XRP will ascend to the same heights as Bitcoin in the cryptocurrency hierarchy.
In summary, the SEC’s withdrawal from the lawsuit against Ripple has heralded a new chapter for XRP, propelling it to notable gains and increasing trading activity. The landscape for Ripple and the wider cryptocurrency industry appears to be shifting positively as regulatory pressures ease. The future of XRP seems more promising, paving the way for potential growth and further developments in its utility within the market.