Ripple Labs’ Legal Battle with SEC: Impact on XRP Market Price

At the end of 2020, the Securities and Exchange Commission (SEC) filed legal action against Ripple Labs, alleging that this cryptocurrency company sold its crypto as an unregistered security. Although the trial is far from over, Ripple Labs won a small victory in the United States District Court. The judge ruled on June 13th that Ripple didn’t violate any federal security laws, dismissing XRP as a security. As a result, the XRP price skyrocketed, giving users high hopes for this token.

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Ripple lawsuit

Illustration: Lenka T.

SEC vs Ripple – a Quick Summary

Okay, Ripple Labs entered the crypto world back in 2012, offering financial institutions a Ripple payment protocol for fast cross-border transfers. The company had created its own blockchain-based digital payment network and XRP token, hoping to provide low network fees and fast transfer to its users. Ripple Labs appeared on the SEC radar because it allegedly breached US securities law by selling XRP as digital assets to raise funds shortly after the project came to life.

In other words, Ripple has been under fire because the SEC claims XRP is a security. As XRP is not registered as a security, the public XRP offering wasn’t legal from SEC’s perspective.

Although SEC vs Ripple is still an ongoing case, Judge Analisa Torres recently ruled that the token in question is not considered a security when sold to the general public. However, the judge also ruled in the SEC’s favor, labeling XRP as a security, but only when sold to institutional investors.

XRP Price Skyrockets After the Court Ruling

The news about the recent improvements in the SEC vs Ripple case spread fast, and it didn’t take long for the outcome to affect the XRP market price. Just take a look at the chart – the market was quiet for a long time, only to see such drastic price movements immediately after the judge ruled in favor of Ripple Labs.

Ripple chart

Source: CoinDesk

On July 13th, the price jumped in less than an hour from $0.47367003 to $0.59626956 per one XRP token. Soon after, XRP’s value surged to $0.83332854, and at the time of writing, it amounted to $0.78885054.

Jelena is a content writer dedicated to learning about all things crypto. Her hobbies are playing chess, drawing, baking, and going on long walks. During winter, she usually spends her leisure time reading books.