Ripple’s XRP in the Crossfire: The SEC Files Charges Ripple’s Defense

The U.S. Securities and Exchange Commission (SEC) is making a surprise attack on the Ripple case. The agency has filed a supplemental letter to remove Ripple’s “fair notice” defense. At the same time, the XRP token has fallen to $0.7 in the last 24 hours. XRP is thus following the downward trend of the market.

The SEC’s Surprising Move

While the popular SEC vs. Ripple case is expected to be resolved in April of this year, the SEC has takena new step. Now many are worried about whether the previous expectations could change.

The American regulator is using a successful move from another case to attack Ripple’s main arguments.

The SEC had taken John M. Fife and five companies he controls to court in September 2020 for selling $21 billion worth of penny stocks and making a profit of $61 billion without registering as securities traders.

FIFE’s defense made a similar argument to Ripple, claiming that the SEC had not adequately warned it and that the term “trader” could be interpreted broadly. Last month, the court rejected that argument.

What does this mean for the Case of Ripple?

Of course, the regulator wanted to use the rejection to attack Ripple’s main argument of “fair notification.”

Similarly, Ripple claims that the regulator failed to notify the company of a possible violation of federal securities laws. According to Ripple, the term “investment contract” is abused by the SEC. Ripple for this:

“The SEC’s theory that XRP is an investment contract is wrong in terms of the facts, the law, and the balances.”

No foreign regulator has so far determined that XRP is a security. In fact, the exact opposite is true. The US would be the unfortunate outlier.

The impact on XRP

The next hearing will be a key day for the outcome of the Ripple proceedings and thus for the XRP course.

The timing is quite complicated for XRP. The downward trend seems to follow the general movement of the crypto market. XRP has fallen 0.8% to $0.77 in the last 24 hours.

After the SEC filed the lawsuit against Ripple in December 2002, the XRP price plunged dramatically from $0.60 to $0.1748. Although it fell even further and lost ground, it remained within the top 10 of the crypto ranking.

Then, XRP recovered over the course of 2021, peaking at $1.34 on November 10, 2021. However, it did not manage to close the year above $1.01.

The expectations of XRP enthusiasts assume that Ripple wins the case and XRP enters a massive rally. Several forecasts expect an increase to the all-time high at $3.4 or even double. However, the earlier forecasts had not taken into account the current downward trend of the crypto market.

And if the Ripple case turns out surprisingly negatively, it could have an additional negative impact on XRP.

Cryptocurrencies are a very volatile, unregulated investment product. Your capital is at risk.

Read More:

  1. Ripple’s XRP in the Crossfire
  2. Ferrari enters the NFT universe
  3. Winz.io revises platform and launches 2 bonus