SEC-Ripple legal battles: XRP price drops
The price of XRP has been falling in recent days, partly due to a decision unfavourable to Ripple in the lawsuit initiated by the SEC.
In fact, Judge Sarah Netburn rejected the company’s motion to dismiss the SEC’s claims on XRP transactions.
In December last year, the SEC filed a lawsuit against Ripple, the company that created the cryptocurrency of the same name in 2012.
At this stage, several legal battles are taking place, sometimes in favour of Ripple and sometimes in favour of the SEC, such as in this particular case.
Therefore, although the price of XRP has risen almost fivefold since the beginning of the year, the news of the judge’s decision against Ripple has thrown some pessimism into the mix, causing the price to fall.
This decision came on 19 May, the day of the flash crash in the crypto markets. However, while the price of bitcoin on that day fell from over $40,000 to around $30,000 and then rose again to $40,000, the price of XRP fell from $1.60 to $1.00 and then only rose again to just over $1.1.
In other words, it seems that Judge Netburn’s decision has prevented the price of XRP from rebounding, as BTC did.
XRP, optimism on price despite the drop
The fact is that, although the lawsuit involves the company Ripple, it also involves the cryptocurrency XRP, as it also concerns its alleged nature as a security token. Therefore, negative news for Ripple coming from the progress of the legal proceedings is easily reflected in the price of XRP as well.
However, it should be remembered that, compared to a year ago, the price of XRP is still 450% higher, although it has not yet managed to break the all-time high of $3.40 dating back as far as January 2018, at the height of the speculative bubble.
At this moment it seems impossible to determine whether the SEC’s lawsuit against Ripple could result in a conviction, an acquittal, or nothing at all, but given that the price of XRP has almost doubled from the level it was at before the complaint, XRP holders are probably optimistic about it on average. Furthermore, although XRP lost half its value in the days following the SEC’s complaint, it took less than two months to return to its previous levels, which is another clear sign of optimism from the community.