XRP Crash: SEC Lawsuit Against Ripple Sends Price Plummeting

A significant downturn in the price of a leading cryptocurrency is occurring, directly linked to a recently submitted complaint by the Securities and Exchange Commission (SEC). Data from CoinMarketCap indicates that the XRP token has experienced a decline of over 42% in the last day, and its value has decreased by more than 63% compared to its peak of $0.76 within the last 30 days. Currently, it is trading at $0.27.

The price fluctuations of XRP have been comparable to those of the most unpredictable cryptocurrencies. After reaching a record high of $3.84 in January 2018, the token has generally trended downwards, approaching extremely low values over the past two years. Although XRP recently benefited from broader market increases seen in other cryptocurrencies, experiencing its most substantial rally in years, these gains were completely wiped out this week following Ripple CEO Brad Garlinghouse’s statement regarding the SEC’s intention to initiate a major lawsuit against the company before the end of the current presidential term.

The core of the SEC’s case is the assertion that XRP should have been classified as a security from its inception, over seven years ago, and therefore should have been registered with the commission. The SEC alleges that the parties involved – specifically Ripple, CEO Brad Garlinghouse, and executive chairman Chris Larsen – raised more than $1.38 billion through sales of the XRP token.

Ripple was recently assessed at a $10 billion valuation after securing $200 million in funding. While Ripple and the XRP token are distinct entities, Ripple controls a substantial portion of the currency’s total market capitalization. Furthermore, the XRP token was once known as “ripple” and previously used the same logo as the company.

Ripple has consistently maintained that XRP is not a security, but rather a resource intended for use by financial institutions. However, the token’s instability has hindered widespread adoption by banks. Simultaneously, XRP is listed on numerous cryptocurrency exchanges, which could broaden the impact of this legal action and involve additional parties within the industry.

In a blog post released yesterday, shortly after the SEC filed its lawsuit, Garlinghouse stated that the SEC’s allegations are “factually and legally incorrect” and expressed confidence that the company would be successful in defending itself before an impartial decision-maker.