XRP investors are interested in knowing what the future holds for the cryptocurrency, which currently ranks sixth by market cap, amid the ongoing legal dispute between Ripple and the Securities and Exchange Commission (SEC), one of the most important aspects that can have a significant impact.
What happens to XRP if Ripple wins its lawsuit against the SEC?
The SEC has taken legal action against Ripple Labs based on allegations that the company is offering unregistered securities in the form of XRP tokens.
The case has been going on for three years, with both parties submitting their final applications and awaiting a decision.
In this line, Finbold asked industry professionals if Ripple could win its case with the SEC and what would that mean for the XRP price if successful.
David Reischer, Lawyer and CEO of Legal Consulting
David Reischer told Finbold that regulators of other nations have decided that cryptocurrencies cannot be considered a security if there is no issuer. For the same reason, he noted:
“Ripple will likely win against the SEC’s claim that Ripple should register its tokens as securities. Ripple has long argued that investors do not have an “investment contract” that gives anyone any rights.
Reischer states that a positive outcome would be “beneficial for the entire crypto industry” because it should offer clarity and confidence for the entire industry. It is essential for the entire industry to have a thorough understanding of all duties and regulatory expectations set by the SEC, the U.S. Commodity Futures Trading Commission (CFTC), and all other financial compliance agencies.
Andrew Pickett, Chief Trial Attorney at Andrew Pickett Law
According to the Florida-based attorney, while the outcome of the lawsuit between Ripple and the SEC is eagerly awaited across the industry, Pickett underlines:
“If Ripple is successful in their lawsuit, it could help solidify its legality in the US market, which will benefit the price of XRP.”
Elsewhere, he sees the result as ‘an important precedent that applies to other cryptocurrencies like Bitcoin’, especially by leading financial institutions.
“This could open the cryptocurrency industry to more mainstream investors and businesses that were previously cautious about entering the market due to regulatory uncertainty.”
The final decision
In particular, if the regulator is successful in this situation, this could have very negative repercussions for XRP, its investors, and the cryptocurrency industry as a whole. Specifically, the regulator has the authority to fine Ripple Labs and require the business to register XRP as a security.
As a result, such a decision would certainly result in XRP being treated in the same way as traditional securities, which could limit both its adoption and use.
On the other hand, if Ripple can effectively defend itself against the arguments presented by the SEC, it can be considered a positive sentiment for XRP as well as an important victory for the firm. Despite Ripple having some success during the hearings, the final outcome of the case is still unknown, which is very important to keep in mind.
At press time, XRP was trading at $0.34, posting daily losses of about 2.7% and the asset’s total market cap was $17.1 billion.