Investors in XRP are interested in knowing what the future holds for the cryptocurrency now ranked sixth by market capitalization, with the ongoing legal dispute between Ripple and the Securities and Exchange Commission (SEC), one of the most important aspects that might have a significant effect on its success.
The SEC initiated legal action against Ripple Labs based on allegations that the company had offered unregistered securities in the form of XRP tokens. The lawsuit has continued for three years, with both parties submitting final filings and waiting for a decision.
In this line, Finbold asked industry professionals about whether Ripple could win the lawsuit against the SEC, and what it would mean for the price of XRP if it was successful.
David Reischer, Attorney and CEO of Legal Advice
David Reischer told Finbold that other nations’ regulators have ruled that crypto cannot be regarded as a security if there is no issuer. For this same reason, he noted:
“Ripple will likely prevail against the SEC claim Ripple must register its tokens like a security. Ripple has long held that investors have no “investment contract” that offers anybody any rights.”
Reischer notes a favorable conclusion would be “beneficial to the entire crypto industry” because it is necessary to offer clarity and confidence for the entire industry. It is essential for the whole of the industry to have a thorough understanding of any duties, and regulatory expectations set out by the SEC, the U.S. Commodity Futures Trading Commission (CFTC), and any other financial compliance agencies.
Andrew Pickett, lead Trial Attorney at Andrew Pickett Law
According to the attorney based in Florida, the result of the lawsuit between Ripple and the SEC is being eagerly awaited across the sector, with Pickett highlighting that:
“If Ripple is successful in their lawsuit, it could help solidify XRP’s legality in the US market, which would benefit its price.”
Elsewhere, he views the outcome as a fundamental setting, ‘an important precedent applicable to other cryptocurrencies, such as Bitcoin,’ especially by leading financial institutions.
“This could open up the cryptocurrency industry to more mainstream investors and businesses that would have previously been cautious about entering the market due to legal uncertainty.”
Final ruling
Notably, if the regulator is successful in this case, it might have very negative repercussions for XRP, its investors, and the cryptocurrency sector as a whole. In particular, the regulatory body has the authority to levy a fine on Ripple Labs and demand that the business register XRP as a security.
As a consequence, a judgment of this kind would certainly result in XRP being treated in the same manner as conventional securities, which may restrict both its adoption and usage.
On the other hand, if Ripple is able to defend itself against the arguments presented by the SEC effectively, it may be considered a significant triumph for the firm as well as a favorable sentiment for XRP. Despite the fact that Ripple had some success during the hearings, the final result of the lawsuit is still unknown, which is very important to keep in mind.
By press time, XRP was trading at $0.34, recording daily losses of about 2.7%, with the asset having a total market worth of $17.1 billion.
