There is a spirited lawsuit going on in the world of Crypto. Ripple has to defend itself against the SEC (Securities and Exchange Commission) and the entire market is holding its breath. New developments are bringing new attention to the case, but what exactly is going on?
To explain that to you in its completeness, we have to go back to December 2020. That was when the SEC, led by Jay Clayton, took legal action against Ripple Labs. The reason: the alleged sale of unregistered securities.
Crypto world watches Ripple with open mouths
Anyone who had bet their money in Ripple’s crypto XRP three years ago knows better than anyone else that a big crash managed to change everything. The reason behind that crash is the lawsuit we are talking about today.
In December 2020, the SEC announced that it would be suing Ripple. It accused the company of selling unregistered securities. A trade that is illegal. US exchanges stopped trading the XRP crypto en masse and the crash was a fact.
Anno 2023, many investors are still suffering the consequences. There are an awful lot of exchanges that no longer want or can offer XRP at all. Investors are thus screwed, to say the least, and Ripple, the company behind the crypto, isn’t letting that go.
Kickback the only option for Ripple
In December 2020, an awful lot of experts estimated Ripple’s chances were slim. The case seemed to be in favor of the regulator, but as time passed, it turned out to be totally off the table.
According to Coinbase CEO Brain Amstrong, that probably had to do with the way the SEC acted. “The SEC realizes that attacking crypo is unpopular because it harms consumers,” he said at the time.
Three years later, we have shown that Ripple is anything but letting the cheese off the hook. The company behind the XRP crypto is striking back, and apparently successfully.
Jay Clayton gave the green light to the lawsuit against Ripple on behalf of the SEC. He has since left the organization and Gary Gensler was the man to take over. It was therefore expected that Gensler would soon put an end to the case, but that has not happened to this day.
Nevertheless, by now we can say that things have changed. Whereas in December 2020 there was mainly fear in the crypto market, anno 2023 it seems more positive.
Crypto world waits, but is positive
The possible outcome of the case is of great importance to the future of the crypto sector and could have major implications for other crypto projects and their communities. If Ripple wins or manages to negotiate with the regulator, it could lead to a similar outcome for other companies in the industry.
Exactly how the case ends no one knows, and that creates uncertainty within the market. Indeed, it has a major impact on the future of the crypto sector, projects and its communities.
Does Ripple Lance win the fight, then other companies within the sector can take a more positive approach to the future. Does the SEC win, then the regulator may have the grounds to crack down on any crypto. If necessary, of course.
One would expect the market to actually be in a minor state because of this, but practice shows that this is not so bad. Ripple Labs and other crypto companies are now aware of the need to comply with laws and regulations. And that is actually the best thing for everyone.