XRP becomes fourth largest crypto amid legal fights over Ripple with SEC

XRP has become the fourth largest cryptocurrency by market capitalisation after the software company Ripple Labs attained a partial victory in legal fight with Securities and Exchange Commission (SEC) on Thursday. Just hours after the ruling , the value of XRP rose and its market cap crossed $42 billion.

The ruling by the New York Court led to XRP jumping from seventh position to fourth position.

"Owing to the recent ruling by the US court, XRP has broken previous resistance levels, and markets are expecting a further breakout in its price action," Parth Chaturvedi, Investment Lead, CoinSwitch Ventures told Republic.

"Additionally, Ripple has observed participation by both retail and institutional investors. The recent ruling may lead to upward retail participation for XRP, as major exchanges have relisted the token for trading," Chaturvedi added. 

At the time of writing, the value of XRP was $0.7935, up 69 per cent from its previous closing price. The market cap surged to $41.43 billion with the trading volume accounting for $12.79 billion.     

"A victory for Ripple would provide much-needed regulatory clarity for XRP. The resolution of the lawsuit could lead to increased investor and market confidence in XRP," Minal Thukral, EVP, Growth & Strategy, CoinDCX told Republic.

"Ripple could further develop partnerships with financial institutions, payment providers, and other entities interested in utilizing XRP for cross-border transactions and remittances," Thukral added.

Ripple labs vs SEC

The change in the price and market cap was the after effect of the ruling of the District Court for the Southern District of New York. The court declared that the offer and sale of XRP on digital exchanges did not amount to offers and sales of investment contracts in a case that involved Ripple Labs and the SEC.

SEC accused the company and former executives of conducting a $1.3 billion unregistered securities | Image Credit: Pexels

The price surge reported was a 98 per cent upwards movement in the following hours, as per media reports. The company did not violate federal securities law by selling its XRP token on public exchanges, stated the Judge.

According to media reports, the case against Ripple has been ongoing since 2020, when the SEC sued Ripple and its executives, Brad Garlinghouse and Chris Larsen, alleging that the company was involved in offering unregistered securities. 

The SEC accused the company and its former executives of conducting a $1.3 billion unregistered securities offering by selling XRP.

Since then, the case has had its share of ups and downs. Today's victory can be sighted as a partial gain for the company as it excluded its asset XRP from the involvement. The case has also been termed as one of the biggest crypto debates.

Reuters had reported that the case was closely watched in the cryptocurrency industry, which disputes the SEC's assertion that the vast majority of crypto tokens are securities and subject to its strict investor protection rules. The agency had brought more than 100 enforcement crypto actions, claiming various tokens are securities, but many of those have ended in settlements.

The ruling was also stated as a partial win for the SEC as the Judge found that the company's $728.9 million of XRP sales to hedge funds amounted to unregistered sales of securities.