Analysts Looks At The Effects Of SEC’s Lawsuit On Ripple

Ripple experienced an incredibly tremendous surge in the price of about 300% within two weeks. The rapid growth can be likened to that of other digital currencies. However, considering Ripple’s market cap, something seems to be fishy about its sudden growth. Dogecoin currently experienced less than 200% surge in price; upon this, it still amounted to only one-fifth of Ripple, globally rated the 4th most significant digital currency. Market cap is salient as it helps traders know when to sell or buy a particular asset as it rose or fell in price.

The Basis of Ripple’s Sudden Surge in Price

Information is power, so they say. This saying does not go with academics alone; it applies to the market world too. Information reaching the market world concerning the ongoing lawsuit between SEC and Ripple is Ripple has the upper hand as it seems it will win the case.

Consequently, the positive news stimulated investors’ minds to keep their contracts with their firm and created a massive inflow of new investors. Hence, the sudden rise in Ripple’s altitude. The internet, however, is the primary factor behind this development.

Is it the source via which the news reached the outside world? It is also the platform used by traders to access Ripple, where they invested their resources, leading to the usual rise in Ripple’s cost. Meanwhile, the underlying danger of this situation is that as the price suddenly increased, it can as well drop suddenly.

What Is SEC Accusing Ripple of?

SEC kept stuck to its gun that Ripple is a security and not a Token. And as such, it is guilty of not registering with a regulatory body before making its sales. It argued that Ripple is in no way similar to BTC and Ether as they are decentralized assets, owned or controlled by no one or authority; meanwhile, Ripple on its own is controlled and issued by Ripple Labs who created it. A commercial firm would run its shares by issuing shares to investors, enticing them to invest in it. That is the same way the firm runs Ripple. It claimed that all the firm’s profits in the past eight years are mainly via sales of an unregistered security.

The crypto firms vehemently claimed that it is not aware of running a security sale. All this while referring to the fact that since the eight years of its operation, it has never for once received any warning or complaint from the security regulatory body concerning its mode of operation. It backed its emphatic response with some media posts made by the body concerning the issue, years before the current tug of war.

The court’s refusal to motions raised by SEC to send a subpoena to 8 banks for personal bank details of top executives at the firm coupled with the grants given to Ripple’s motion of accessing SEC’s documents in searched of evident has made it seem Ripple is on the winning side. Consequently, this has caused a great uproar in the digital market space.

However, it is still a fact that SEC has brought down some firms with similar situations. TON is a good example. With this in mind, it is still possible for SEC to win. Ultimately, after this whole case, what is more, critical now is XRP going to be a security or a cryptocurrency? Either outcome would have a severe impact on the market. It is very salient that investors take precautions in investing in Ripple, which rose overnight as it would be a fatal loss for them, should it fall at the end.

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