FreeBtcTap: Why would XRP Ripple bounce back after this lawsuit from the sec?

Are you interested in knowing what would be the ramifications of the SEC lawsuit on XRP ripple then you’ve come to the right place because I am going to dig deeper into this fact? I know that you are curious that know why would XRP Ripple sill bounce back after this lawsuit from the sec?​

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Before we delve deeper into our journey, I want my readers to know what exactly is XRP Ripple? and what differentiates it from the traditional fiat currency? Ripple XRP is the leading crypto coin that has piqued an investor’s interests in the past couple of years.

Contrary to other well-known cryptocurrencies like Bitcoin and Ethereum, XRP doesn’t solely rely on decentralization, but instead, it has completely revolutionized the entire financial landscape that’s the reason why big investment firms, corporate banks, fintech companies, and businesses around the globe deemed it as the perfect ‘value-returning’ asset.

This might sound counterproductive when the sole motivation for all the retail investors for investing in cryptocurrency is the lack of a central regulatory body or its freedom from the traditional financial system. However, many crypto analysts are of the view that it could be the major driving force behind Ripple’s success.

Even though the crypto assets are incredibly speculative, but some crypto experts are of the view that XRP’s unique market position allows it to escape crypto market turbulence and its price is likely to stay stable in the foreseeable future.

Despite the growth potential of XRP Ripple, the recent lawsuit from the SEC could have a profound impact on its growth trajectory. Without any further ado, let’s discuss whether XRP Ripple will bounce back after this lawsuit or not?

Since the XRP Ripple CEO Brad Garlinghouse was accused in an SEC lawsuit, XRP token value plundered dramatically. Eventually, many leading crypto exchanges imposed an embargo on XRP tokens, and many crypto trading platforms like LocalBitcoin completely delist it.

XRP token holders were delighted to see that the token price increased exponentially and reached $0.90 on the leading US-based crypto exchange Coinbase in November. In that particular month, the XRP Ripple token’s value experienced a dramatic increase of 150%. In this bullish trend, some crypto analysts predict that XRP price is likely to reach $3 in the foreseeable future.

Just one month later, XRP token holders are highly optimistic about the future prospect of XRP price. On Dec 22, the United States Securities and Exchange Commission filed a lawsuit wherein Ripple CEO Brand Garlinghouse and its Co-founder Chris Larsen was accused of raising $1.4billion via an unregistered selling of ‘digital assets securities.’

In the SEC lawsuit, they hold an opinion that XRP was security and must be meticulously adhered to the US laws for financial securities before being sold told to US citizens at large.
Once the news of SEC allegations arrives in the market, the market capitalization of Ripple-based XRP tokens plummeted dramatically and it lost one-fourth of its initial value within 24 hours.

On the flip side, SEC facilitates delisting and freezing of XRP tokens on the major crypto exchanges. Initially, the delisting of tokes and prohibition of trading takes place on only the small crypto exchanges like OSL and Beaxy. But with the spread of this news, major crypto trading platforms like BitStamp and US-based crypto exchange Coinbase have now restricted their users from trading and depositing XRP tokens from 1stJanuary 2021.

Once the decision made by Coinbase is public, XRP prices plummeted 20% and a few days back it was traded at the historic low of $0.22.

SEC Allegation on XRP
The SEC allegation on XRP Ripple seems quite damning and is likely to hurt the market reputation of this token. SEC regulators’ were of the view that the top-tiers of XRP vehemently violated the securities act of 1993 for which they must be penalized.

From the legal standpoint, this lawsuit imposes charges on both Larsen and Garlinghouse for illicit sales of a hefty amount of the XRP tokens that includes 1.7 billion XRP and 321 million XRP respectively. Furthermore, the lawsuit accused both the co-founder and CEO of Ripple XRP of unlawful fundraising as initial sales of XRP tokens were channelized via XRP II LLC.


According to the lawsuit:
“Accused consistently hold a substantial amount of XRP without complying with the US securities act. They persistently capitalize information symmetry they’ve created in the market to monetize their XRP and thereby putting the investors at risk.”

Simply speaking, the crux of the SEC lawsuit is the fact that all the digital currencies must have to comply with the “Howey test” under the federal securities law which raises serious concerns about the token selling efforts of XRP CEO and co-founder.


Likelihood of XRP Price Recover
Even though the allegations against the XRP are seemingly damning, but the Ripple management can manage to remain resilient.

Michael Kellog, a legal expert of Ripple told in his interview conducted by Forbes:

“Almost all the legislative bodies of the U.S. government that includes the U.S Department of Justice and Treasury Department’s FinCen have already declared XRP a currency.”
Kellog is of the view that since XRP is a proclaimed currency therefore, all the transactions that take place via it didn’t lie in the jurisdiction of federal securities law, he asserted:
“This isn’t the first time when SEC crosses its statutory limit. U.S. courts had corrected it time and again and it is likely to do the same this time.”
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The SEC has been strictly criticized for crossing its constitutional domain specifically when it comes to digital currencies. The same practice by employed by the SEC in the case of telegram’s TON network as the SEC somehow managed to prohibit it from launching anywhere in the world. Another legal concern for the XRP token holders is that it is not deemed security in Asia and Europe.


Conclusion
Simply speaking, it solely depends on the U.S Department of Defense to decide the fate of the XRP. As of today, XRP lost a substantial amount of its market valuation. But this devaluation is unlikely to persist once Ripple XRP managed to defy the SEC lawsuit.

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