Ripple, XRP vs SEC. Three entities at the center of the hottest battle in the crypto space.
The timing of a decision in the widespread legal dispute between Ripple Labs and the US Securities and Exchange Commission (SEC) is currently the subject of heightened speculation. While the popular consensus among people following the matter, including Ripple CEO Brad Garlinghouse, is for a resolution by the first half of 2023, it seems highly unlikely given the prevailing uncertainty.
Recently prominent XRP influencer Mr Huber caused something after citing a “rumor” about Judge Analisa Torres, who is presiding over the case. He claimed she might not release the ruling until the summer of 2024. Last week, a similar rumor circulated that Ripple Labs and SEC were holding a meeting behind closed doors. However, this was later categorically denied by the lawyer John E Deaton.
While the merits of the rumor are highly debatable, these suspicions reflect growing fear among XRP enthusiasts and broader market participants. Especially those who have been keeping a close eye on the XRP-SEC saga.
Read Ripples [XRP] Price Forecast 2023-24
The big showdown
According to an interview given to CNBC, CEO Garlinghouse said Ripple will eventually spend $200 million by the time the lawsuit is over. In fact, this was the company’s first public disclosure of legal fees.
The controversial lawsuit, filed by the SEC in December 2020, has now entered its third year. The SEC alleged that Ripple executives had an initial public offering (IPO) of XRP – an unregistered security at the time of raising capital. According to the complaint, Ripple raised money by selling XRP tokens as an unregistered security.
In response, Ripple claimed that the SEC was selective in pursuing XRP as the regulator never warned or notified the organization. Ripple maintains the position that the token is used in its business to facilitate cross-border transactions between banks and other financial institutions.
Since its inception, Garlinghouse has potshot the SEC’s whimsy. And he has remained confident about Ripple’s chances. In fact, at the recent XRP Las Vegas 2023 meeting, he expressed his gratitude and appreciation to the XRP community for their support during the legal battle against the regulator.
Great to meet so many people from the XRP community #XRPLasVegas2023 – the camaraderie is remarkable (and a great feeling in person vs. Twitter!) This community has stood by and supported Team Ripple as we fought the good fight…I cannot express my gratitude enough pic.twitter.com/lb9TCURv3C
— Brad Garlinghouse (@bgarlinghouse) May 6, 2023
Also, in a recent statement, while highlighting the weakness of SEC’s arguments, attorney John Deaton called them out “far-fetched”affecting all possible future sales, even in regions outside the US
Ripple betting on offshore markets
Ripple Labs has made clear its intentions about expanding its business outside of the US, even moving in case the verdict does not come in its favor. And it has started betting on emerging crypto markets in Asia and elsewhere.
For example, Ripple announced the opening of its new office in Dubai, UAE, which will serve as the headquarters of the Middle East and North Africa (MENA) region. The company believes the region has been a large market for its on-demand liquidity (ODL) solution, which enables cross-border payments.
Dubai is making great strides as globalization #crypto center and CEO @bgarlinghouse and regional MD @navinblockchain are in town for #DubaiFintechSummit to deepen our commitment to the region, announce a new office and host Swell Global 2023 in the UAE.https://t.co/GN5Q0q8oWA
— Ripple (@Ripple) May 8, 2023
In his earnings figures in the first quarter for 2023, Ripple talked about the growing demand for ODL in Latin America.
Bitso, the leading crypto exchange in Latin America, surpassed $3.3 billion in US-Mexico transactions by 2022. This is a sign of the growing institutional use of cryptocurrencies as a cross-border payment solution.
State of XRPL
On-chain activity on XRP ledger (XRPL) increased for the second quarter in a row as transactions increased 9% to 116 million. The increase was driven by strong growth in the non-fungible token (NFT) landscape and trading volumes of decentralized exchanges (DEX).
Dates from XRP SCAN revealed that as of May 8, about 1.21 million transactions have been carried out on the blockchain. This was the highest since April 17, when the number of transactions skyrocketed to more than 4.2 million.
However, the number of new contracts being created in the ledger was steadily decreasing – A minor concern in terms of adoption.
Many insiders expect the lawsuit to shed much-needed light on the SEC’s ambiguity about what it considers a security. In fact, in 2023, SEC has taken similar actions against crypto platforms such as Kraken and Coinbase.
Source: XRP SCAN
Realistic or not, here is the market cap of XRP in terms of BTC
Is 2023 the year for XRP?
Payment-oriented crypto had grown beyond it 22% on a year-to-date (YTD) basis at the time of writing, building on optimism about a favorable litigation outcome and increased bullish sentiment in the crypto market.
A big reason behind the increase is the optimism shown by big whale addresses. For example, Santiment revealed that addresses holding more than 1,000 XRP tokens have steadily increased since the beginning of the year. And the shopping spree shows no signs of abating as whale trades continue to rise.
Source: Sentiment
Hoping that Ripple would emerge victorious in the lawsuit, demand for XRP skyrocketed in 2023 in the Futures market. Open Interest (OI) rose to $728 million on March 30, reaching a five-month high.
Since then, however, it has gradually dropped to $426 million, reflecting the decline of XRP’s price in the charts.
Source: Coinglass
