XRP, the native currency created by Ripple, continues to tiptoe lower following the announcement of an enforcement action by the Securities and Exchange Commission. In fact, on the day the SEC announced the lawsuit, XRP held a market cap of over $20 billion. Today, that amount has been cut in half. Litecoin, long parked below XRP, is now competing with the digital currency for 4th place in the ranking of the top 5 cryptos. If XRP goes any lower, it may be lapped by Polkadot next.
XRP has been de-listed by a growing number of crypto exchanges that are worried about being sullied by the allegations that XRP represents the sale of an unregistered security. At the time of the announcement by the SEC, Stephanie Avakian, Director of the SEC’s Enforcement Division, explained that the Commission alleges that Ripple, and founder Chris Larsen, and CEO Brad Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors “… which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.”
Last week, Ripple defended itself in a public statement that claimed regulatory uncertainty and a regulator that has acted to harm innovation was to blame:
“…we will defend our company and look forward to settling this matter in court to finally get clarity for the U.S. crypto industry,” stated Ripple.
But a long drawn out legal battle with the SEC may undermine XRP even further. One insider told CI, they expect Ripple to change course and settle. This may be the best path to salvage the entire thing.
Meanwhile, crypto markets are booming with Bitcoin hitting record highs. Some observers believe XRP holders have abandoned ship to a more secure digital asset driving BTC even higher.