Already in 2020 the US Securities and Exchange Commission (Sec) Ripple and claimed that the company broke the securities laws when it sold their sold XRP (Crypto: XRP) Cryptocurrency for investors. The case was partially solved in August 2024, but it is not yet officially over.
Ripple was not the only goal of the Sec. The supervisory authority still has complaints against a number of crypto companies, including two of the world’s largest exchanges. Binance And Coin base. After Donald Trump is president, however, a change in the sea is underway because he has often campaigned for the industry.
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In fact, a Federal Supreme Court, which was answered at an application by Binance and the SEC (led by Trump’s incumbent chairman), has just approved a 60-day break in this case, and it could be speculation-ripple case next . The following means for XRP.
Image source: Getty Images.
Why did Ripple check the SEC so much?
Ripple created a payment network called Ripple Payments (formerly Ripplenet), with which the banks can directly settle money transfers with each other, even if they do not use the same infrastructure. This means that international payments can be solved immediately between a bank that uses the Swift network (e.g.) and a bank that does not do. Without ripple payments, the same transaction would take days.
XRP was developed to standardize these payments. For example, a Spanish Bank XRP token could send to a US bank instead of euros and bypass currency fees and other costs. Then the bank can include the XRP cheap in the Fiat currency of its choice.
XRP has an overall range of 100 billion tokens. 57.7 billion are in circulation for the current letter, and the remaining 42.3 billion are kept by Ripple, which releases small amounts every month to question the demand every month. The SEC argues that XRP should be classified as financial security such as a share or a bond, which means that Ripple (like the issuer) would have to work as part of a strict series of regulations.
Bitcoin has not exposed to the same examination of the SEC because it is completely decentralized. It has a fixed overall offer, and there is no person, company or government who can change or issue more coins. Simply put, it does not correspond to the definition of financial security.
The case of the SEC against Ripple was partially solved in August when a judge decided that XRP could only be security under certain circumstances, e.g. B. if it was issued at institutions. It could not Be a security if it is used in transactions or is traded on crypto exchanges. Ripple had to pay a fine of 125 million US dollars, but the Sec made a calling against the decision, which the parties could theoretically combine in court for a few years.
A new regulatory regime
Trump was an advocate of the crypto industry on the campaign path and threw his support for radical ideas such as the establishment of a strategic US -Bitcoin reserve. It is also for deregulation, not only for crypto, but in general.
Shortly after the elections on November 5th, Trump said that he would appoint Paul Atkins as the Sec chairman. Atkins is currently Chief Executive Officer of Patomak Global Partners, a consulting company specializing in financial services and compliance. He is also the co-chair of the token Alliance, a crypto interest representation, so he is a great supporter in the industry.
Atkins has not yet been confirmed by the Senate, so he is not officially at work. In the meantime, Trump has appointed Mark Uyeda to be the acting chairman. He is more with the president’s vision than the former chairman Gary Gensler, who resigned in January.
Under the leadership of Uyeda, the SEC recently formed a crypto -Sksk Force to create regulations and check existing legal cases, possibly, including against Ripple.
A potential victory for Ripple and XRP, but there is a restriction
In theory, the solution of your case with the SEC Ripple would give more operational freedom. This could pave the way for more XRP emissions, which could lead to a greater introduction, which is the key to creating sustainable value.
But there is a very big restriction. Banks do not have to use XRP to use the Ripple Payments network -you can use FIAT currencies and still benefit from the quick transfers of the network. This could explain why XRP will be under his record high from 2018, although the cumulative number of transactions processed by Ripple continues to increase.
Therefore, the value of XRP could be determined more by speculators than by fundamental demand, which makes its future very difficult to predict. Remember that the token lost more than 90% of its value in 2018 shortly after the climax of a price of $ 3.40, and there is nothing that prevents this in turn.
While a friendlier regulatory environment is certainly good news for Ripple and XRP, there is no guarantee that it leads to further profits for investors.
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Anthony di Pizio has no position in one of the stocks mentioned. The Motley Fool has positions in and recommends Coinbase Global and XRP. The Motley Fool has a disclosure policy.
The views and opinions expressed here are the views and opinions of the author and do not necessarily reflect Nasdaq, Inc..
