XRP Adoption State Ahead of the Ripple vs SEC Trial in April
The Ripple vs SEC lawsuit, which has lasted over three years, enters the trial stage in April 2024. It will resolve the question of whether Ripple’s XRP cryptocurrency is a security or not.
The legal battle started in December 2020 when the regulator filed a lawsuit. Afterward, a series of document disclosures, statements, and motions proceeded.
How has the lawsuit affected the adoption of XRP, and what are the key things to know about the case? We explore below.
In December 2020, the SEC sued Ripple’s executives Brad Garlinghouse and Chris Larsen over the sale of the XRP cryptocurrency.
According to the SEC, Ripple Labs violated the law by raising over $1.3 billion from investors.
The regulator argues that XRP is a security, and Ripple failed to register it as the federal law requires.
A major narrative in the case was the release of Hinman's speech documents in 2018. Hinman, who was the director of the SEC's Division of Corporation Finance at the time, stated that Bitcoin and Ether are not securities. In June 2023, despite the SEC’s efforts to prevent their release, the Hinman documents were made public.
In July 2023, Judge Torres ruled that XRP is not a security, although it can be sold as a part of a security.
This means that secondary market sales of XRP coins are not considered sales of an unregistered security. The current focus shifts to the institutional sales of XRP, addressing the question of remedies, and the overarching need for clearer regulation.
In April, the Ripple vs. SEC legal battle will enter a new, decisive phase as the discovery stage has concluded. The judge has set deadlines for the parties to submit briefs related to remedies, during which they will each present their ideas, evidence, and positions on potential solutions.
How has the lawsuit affected the adoption of XRP, and what are the key things to know about the case? We explore below.
Key Things to Know about the Ripple vs SEC Case
To figure out what the case is about, it’s necessary to start from the beginning of Ripple’s foundation. It’s a blockchain-based payment network created back in 2013 that provides solutions to facilitate cross-chain payments with low costs.
In December 2020, the SEC sued Ripple’s executives Brad Garlinghouse and Chris Larsen over the sale of the XRP cryptocurrency.
According to the SEC, Ripple Labs violated the law by raising over $1.3 billion from investors.
The regulator argues that XRP is a security, and Ripple failed to register it as the federal law requires.
Ripple lawyers disagree with the SEC, stating that XRP is a currency, not a security. In March, the Ripple team submitted letters to the court mentioning the lack of notice by the SEC regarding the classification of XRP as a security. They pointed out the lack of a clear regulatory framework for crypto market participants in the USA.
A major narrative in the case was the release of Hinman's speech documents in 2018. Hinman, who was the director of the SEC's Division of Corporation Finance at the time, stated that Bitcoin and Ether are not securities. In June 2023, despite the SEC’s efforts to prevent their release, the Hinman documents were made public.
In July 2023, Judge Torres ruled that XRP is not a security, although it can be sold as a part of a security.
This means that secondary market sales of XRP coins are not considered sales of an unregistered security. The current focus shifts to the institutional sales of XRP, addressing the question of remedies, and the overarching need for clearer regulation.
In April, the Ripple vs. SEC legal battle will enter a new, decisive phase as the discovery stage has concluded. The judge has set deadlines for the parties to submit briefs related to remedies, during which they will each present their ideas, evidence, and positions on potential solutions.
How Has the Lawsuit Affected XRP’s Adoption?
Following the news of the Ripple vs SEC lawsuit, several crypto exchanges, including Coinbase and Crypto.com, delisted XRP. Leading transfer company MoneyGram, which used XRP for cross-border payments, ended its partnership with Ripple.
Despite the difficulties, however, interest in XRP continues to be high in 2024. The coin is among the top 10 cryptocurrencies by market cap.
Ripple has been actively building collaborations with organizations around the world, including in the UK, UAE, Singapore, and other countries. The growing number of partnerships boosts XRP’s demand and can potentially drive its value.
The upcoming conclusion of the Ripple vs SEC trial is predicted to have a great impact on XRP’s adoption and price. If the company wins, US financial institutions will adopt the Ripple technology, create investor confidence, and bring regulatory clarity to the industry. If the SEC wins the case, the legal status of cryptocurrencies may continue to be uncertain.
What to Expect from the Ripple vs SEC Trial?
There are only theories regarding how long the trial may take and its potential outcomes. For XRP holders and the entire crypto market, the verdict is of significant importance. It will establish a regulatory foundation and determine the future developments of the crypto ecosystem.
Anahit Avetisyan
Author
Web3 writer and crypto HODLer with a keen interest in market trends and recent technologies.
