Ripple Labs Responds to SEC Claims, XRP Returns to 4th Place
XRP token issuer, Fintech Startup Ripple Labs, has published comments on the allegations brought by the Securities and Exchange Commission (SEC).
Ripple Labs has officially responded to claims made by the US financial market regulator on December 23, 2020. On Friday, January 29, 2021, the startup's management sent comments to the Federal District Court of the Southern District of New York (SDNY). The SEC alleges that Ripple Labs, as well as current and former executives Brad Garlinghouse and Chris Larsen, sold unregistered XRP tokens worth $1.2 billion.
Ripple responds
Ripple produced a detailed response on 93 pages, where paragraph after paragraph broke all the SEC's allegations against it. The company chose offensive tactics on all fronts, focusing on Ripple functions, as well as on the correlation of the value of XRP with other cryptocurrencies.
Moreover, the SEC's accusations contradict the position of other government agencies. In 2015, the Financial Crimes Enforcement Network (FinCEN) classified XRP as a digital currency and allowed the sale of the token. The SEC was aware of the decision and did not mind. Ether was also involved in the case. According to the authorities from Ripple Labs, they asked the SEC how they have determined the status of non-security. Representatives of Ripple accuse the SEC of undermining the success that XRP has made so far.
In its turn, Ethereum is also advancing and alongside Bitcoin accepted as a primary method for crypto payments. Ether is a blockchain system, a platform so to say. Many smaller cryptos that nobody has honestly heard about are based on the Ethereum blockchain. Therefore, by having this extra feature it's able to avoid labels that are more common with cryptos like BTC or in this case XRP.
Most of the private coins that crypto casinos have created are all based on the ETH blockchain, which is why the ETH gambling websites 2021 list is expected to double or triple even if they don't have ETH as an option for deposits.
What's next?
The answer is the first step before two court hearings. The next major event is scheduled for February 15. On that day, the deadline for the parties to agree on a case before the magistrate's court expires. The Court always offers the parties to the conflict such a settlement, but they must agree on it. However, neither Ripple nor the SEC expressed any desire. At the end of this period, a hearing will be held in the form of a conference call. It is scheduled for February 22.
Most likely, Ripple and the SEC will communicate out of court. According to SEC Commissioner Hester Pearce, also known as "crypto mom," the commission often settles such cases in the pre-trial order.
Is XRP on the hype again?
The U.S. Senate has confirmed Janet Yellen as Treasury Secretary. Unlike his predecessor, Yellen is cautiously optimistic about digital currencies in general. She did not make any specific comments that could affect the Ripple Lab case. Federal Reserve Chairman Jerome Powell will remain in office for another two years, but his opinion does not have much weight in this case. Powell and Yellen had a good working relationship.
Meanwhile, on Saturday, January 30, the XRP rate for a few hours rose by more than 60% and tested the area above $0.51. At the time of writing, XRP/USD is trading at $0.38 and ranks fourth in the cryptocurrency market capitalization ranking. Rapid growth helped the coin to push Polkadot and regain lost positions.
Some traders believe that XRP has followed in the footsteps of Dogecoin (DOGE). We can recall that at the end of last week cryptocurrency-meme for a day rose by 1000% against the background of the pump in Twitter and Reddit. But we should also anticipate that recent problems with the SEC and the ongoing problems will affect XRP’s value in the future.