SEC v. Ripple: What if Ripple loses lawsuit?

Rick Steves

That is the million-dollar question. Better yet, the 40 billion dollar question, according to the XRP market cap.

Although XRP holders have no stake in Ripple Labs, the fluctuating price of the cryptocurrency has led its owners to follow the SEC v. Ripple lawsuit intensely.

The SEC’s motion to strike Ripple’s Fair Notice defense is the most important of the case so far. The case can even come down to a Summary Judgement on that affirmative defense, which seems to be in Ripple’s interest.

A lot has been said in the past and the final result of the lawsuit is anyone’s guess for the time being. Still, Ripple Labs is most likely analyzing its options for any settlement deal or decision by the court.

In October 2020, co-founder Chris Larsen said that the firm might be moving its headquarters overseas. “To be honest with you, we’re even looking at relocating our headquarters to a much more friendly jurisdiction.”

“[You] have the advantage of having the capital markets, the regulators, and the innovators all in the same city. That’s not the case in the US, where New York investors, Washington lawmakers, and Silicon Valley tech entrepreneurs “don’t understand each other”, he told Fortune

In early April 2021, CEO Brad Garlinghouse told CNN the firm is ready to march on without the XRP if it loses the legal battle against the US regulator, which claims XRP is a security and the firm illegally sold the cryptocurrency to investors.

“We could do that. We’ve always thought about our product as ‘How do we solve a customer’s problem first and foremost?’ And I think that has served our growth. It’s a reason why we have seen so much activity now, billions and billions of dollars of transactions across Ripplenet, our network for payments”.

So, to answer the question ‘What if Ripple loses lawsuit?’: no one knows besides them, but relocating to a friendlier jurisdiction is most likely to serve the interests of XRP holders in such a scenario.

Brad Garlinghouse, Chief Executive Officer at Ripple Labs, has recently told CNBC’s Squawk Box “there’s a misunderstanding of how these technologies can be applied”.

“In the United States, there has been a lack of regulatory clarity. Other countries, G20 markets, they have invested the time and energy, either through legislation or rulemaking, to provide that clarity and certainty, which allows investors to participate, entrepreneurs to build.”

“XRP is an open-source technology very analogous to bitcoin, but the SEC is making the assertion that these are investment contracts … that Ripple sales of XRP to our customers is actually an investment contract. That isn’t true. If you buy XRP, you don’t have ownership of Ripple and ironically you have XRP owners who have tried to sue the SEC for even bringing the case.”

While regulatory uncertainty prevails in the United States, for the time being, the IRS wants to get paid. This has sent jitters within the crypto space and, as usual, questions about security and privacy arise.

In the meantime, institutional interest in digital assets is no longer breaking news. A recent research report by Goldman Sachs said “Bitcoin is now considered an investible asset“.

eToro, which was one of the first to offer access to crypto markets since 2013 and has now 20 million registered users, has added Aave, Compound, Yearn.Finance, and Decentraland to a total of 23 cryptos available for trading.

Read this next

Digital Assets

AAX ranked world’s second largest spot exchange, only behind Binance

Crypto trading volumes experienced their first surge in activity since March as the majority of digital assets began their recovery from the recent grim price action, according to a new report by Cryptocompare.

Digital Assets

Bitpay teams up with Cardlytics to provide 15% cashback rewards

Crypto payment service provider Bitpay announced a partnership with Cardlytics Inc (NASDAQ:CDLX), which it says will offer more rewards for BitPay cardholders on its platform.

Digital Assets

BlackRock digs further into crypto with spot bitcoin private trust

BlackRock, the world’s largest asset manager with almost $8 trillion in AUM, has launched a spot bitcoin private trust for institutional clients in the United States.

Digital Assets

SEC fines Bloom Protocol, orders refund to BLT token purchasers

Blockchain startup Bloom, which raised $30 million in funds via an initial coin offering (ICO), has agreed to return the money to token purchasers and pay a $300,000 fine, the SEC announced.

Institutional FX

FX volume takes step back at Singapore Exchange in July

The Singapore Exchange (SGX), the country’s paramount exchange operator, has released its monthly volumes across its FX, derivatives and commodities segments for July 2022.

Market News

The Week Ahead: 12 August from David Madden, Market Analyst at Equiti Group

There was a spike in volatility last week when the US CPI report ticked down to 8.5% from 9.1%, missing the forecast of 8.7%. The announcement led to chatter the Fed might not carry out a 0.75% interest rate hike in September.

Digital Assets

Pomelo Pay adds crypto payments capabilities from TripleA

According to a June survey conducted by Deloitte, nearly 75% of retailers plan to accept either cryptocurrency or stablecoin payments within the next two years.

Executive Moves

Talos appoints “boss, mentor, and friend” Neal Pawar as strategic advisor

“Foundational technologies are needed for institutions to fully embrace this potential, however, and in my opinion Talos’s platform is steadily becoming the de facto industry standard for digital asset trading.”

Technology

Avelacom enhances Middle East connectivity amid new market trends

Avelacom found that smaller markets in the region were not sufficiently covered by third-party vendors.

<