Investors can’t seem to get enough of altcoins these days. While Bitcoin (CCC:BTC) is still solidified at the top of the crypto mountain, smaller currencies Cardano (CCC:ADA) and Stacks (CCC:STX) are on the climb. Another investor favorite right now is XRP (CCC:XRP), the token of Ripple.
With details emerging about the Ripple lawsuit, which has the company taking heat from the U.S. Securities and Exchange Commission, investors are noticing a lot of movement for the coin.
In fact, XRP had just crossed the $1 mark for the first time in three years on Tuesday. So with this in mind, what should you know now?
Main Takeaways From the Ripple Lawsuit
Without further ado, here are the major things investors should know about the SEC’s Ripple lawsuit:
- This case has been dragging along since December 2020. The suit alleges that Ripple and its executives have raised $1.3 billion through an unregistered security assets offering.
- The crux of the SEC’s argument is that because Ripple’s XRP token is not a currency but a security, the distribution of it is a violation of SEC regulations.
- However, Ripple benefitted from a bombshell moment back in March that poked holes in the SEC’s argument. Judge Sarah Netburn had said in the courtroom that XRP seemed like a currency to her. Not just a currency, either, but a currency with a utility that distinguishes it from that of Bitcoin.
- That moment was a crushing blow to the SEC, but another happened just yesterday that is furthering Ripple’s solid case against the accusation. Ripple had been granted, also by Judge Sarah Netburn, access to some of the SEC’s internal communications.
- The company is going to comb through this data to find internal communications on how the SEC defines a cryptocurrency as a security. If it can find a message that fits the bill to label XRP as a currency rather than a security, it could be a knockout blow to the SEC’s case.
- In the meantime, XRP is still being traded. While delisted on most U.S. exchanges, investors can use Asian exchanges to purchase the XRP token. As such, each new piece of information in the Ripple lawsuit that becomes public is causing movement for the altcoin.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.