While the cryptocurrency market is in the red, Ripple’s XRP is almost 30% higher in price. What are the reasons for this singular rise?
XRP price is up sharply
While all crypto-currencies are down in price over the past week, including Ether (ETH) which has lost 20% following the Merge, XRP has risen 27% over the same period.
XRP is the cryptocurrency of the company Ripple, which works for a decentralised international payment solution. If you want to know more, we have presented this project in detail on our dedicated fact sheet.
7 day XRP rate
The rise in the XRP price can be explained by different factors. The main reason is most likely the recent twist in the case between Ripple and the US Securities and Exchange Commission (SEC).
Indeed, a legal battle was launched in 2020 by the US financial regulator against Ripple and 2 of its executives, accusing them of having sold XRP tokens, classified, according to the SEC, as unregistered securities.
This case goes far beyond Ripple, as if the judge in charge of the final decision rules in favour of the SEC, the latter could then initiate legal proceedings against crypto-currencies closely resembling XRP.
But recently, the 2 parties filed a motion for summary judgment, a legal process used so that the court of competent jurisdiction can make a decision based on the facts established without waiting for a trial to be completed
Boost of optimism for Ripple and XRP
It would appear that the SEC is having difficulty proving that XRP can be classified as a financial security, according to some Ripple representatives.
As such, Stuart Alderoty, a member of Ripple’s general board, tweeted to express what could be likened to an admission of failure by the SEC.
My hot take – after two years of litigation, the SEC is unable to identify any contract for investment (that’s what the statute requires); and cannot satisfy a single prong of the Supreme Court’s Howey test. Everything else is just noise.
– Stuart Alderoty (@s_alderoty) September 17, 2022
My point – after two years of litigation, the SEC is unable to identify any investment contract (which is what the law requires); and cannot meet any of the criteria of the Supreme Court’s Howey Test. Everything else is just noise. “
Similar to Brad Garlinghouse, the CEO of Ripple, who also spoke out on Twitter:
“Today’s filings make it clear that the SEC is not interested in enforcement. It wants to redo everything in an unconscionable effort to expand its jurisdiction far beyond the authority granted to it by Congress. “
In addition, Ripple also defended itself by stating that XRPs could not be considered financial securities as they are not linked to any investment contract. Therefore, investors would not have any special rights with respect to the XRPs acquired.
It remains to be seen how the lawsuit will develop, which in either case, may not leave the market indifferent.
