Just a few weeks ago, XRP outperformed Bitcoin and all that had to do with Ripple was roses. However, less than 10 days ago, it all ended abruptly.
It emerged that the US Securities and Exchange Commission initiated proceedings against Ripple and its two top executives for securities fraud.
The complaint alleges that as of 2013, Ripple raised funds through the sale of digital assets known as XRP in an unregistered securities offering to investors in the US and worldwide. Ripple also reportedly distributed billions of XRPs in exchange for cashless consideration such as labor and market-making services. “
The news shocked the cryptocurrency world. More so, the timing of the announcement, as the SEC leadership has only a few weeks left with the rest of the Trump administration before leaving office.
The XRP price suffered tremendously. From its mid-November high of just under $ 0.80 today, XRP has dropped to $ 0.1686 at one point. This corresponds to a decrease of 79%.
There appears to be a battle going on today with the price up 2% in the past 24 hours to $ 0.2198 at the time of writing.
Source: XRPUSDT on TradingView.com
XRP Exchange Exodus is accelerated
Each day a different crypto exchange will either suspend or remove XRP trading. Yesterday it was the turn of Binance US, which decided to cancel XRP with effect from January 13, 2021.
According to crypto researcher Larry Cermak, this makes Kraken the only major exchange serving US users who want to trade XRP. However, Cermak believes that Kraken will soon coincide with the others.
Kraken is now officially the last major exchange for US clients that XRP has not yet delisted. Coinbase, Bitstamp, Bittrex, Binance US and FTX US have already been delisted. The announcement must be imminent.
– Larry Cermak @ (@lawmaster) December 30, 2020
The latest development provides for a pre-trial conference for February 2021, at which all parties have the opportunity to discuss the further path.
While Garlinghouse has been silent on the matter since Christmas Eve, it looks like this case is going to go to court.
What particularly worries XRP owners is that the SEC has rarely lost a lawsuit. And never one with cryptocurrency security tokens.
The SEC has a strong track record
To determine what could happen to Ripple, previous run-ins related to cryptocurrencies must be investigated with the SEC.
YouTuber Ben Armstrong, also known as BitBoy Crypto, posted a video about it. In it he refers to cases with Tezos, EOS, Telegram and Kik.
In the case of Tezos and EOS, Armstrong pointed out that both companies gave in and paid for their respective settlements. That is, no company went so far as to go to court.
While Telegram and Kik decided to challenge the SEC.
The result for Telegram was the judicial side of the SEC, resulting in a civil penalty of $ 18.5 million and a $ 1.2 billion return for investors on the sale of unregistered Gram tokens.
In Kik’s case, the court also sided with the SEC for the illegal sale of his unregistered Kin tokens. The company was fined $ 5 million.
As Garlinghouse says, “Not only are we on the right side of the law, we’re on the right side of history.” The truth is, the SEC has a strong track record.
This means that the odds against Ripple are very stacked.