How Is Ripple Doing?

    14 Sep 2021

    The conflict between Ripple and the American financial regulator SEC, which has long been a pain in the neck for the cryptocurrency company, suddenly “froze”. It seems that the regulator is losing the court case, and we are in for further XRP price increases.

    August 31 was the deadline for the US Securities and Exchange Commission (SEC) to submit to the court the case files, on the basis of which it found that Ripple was selling unregistered securities (i.e., its XRP token). Surprisingly, the Ripple company itself requested these files, and the SEC representatives’ behavior in the course of the year-long proceedings has been rather odd.

    They have not presented the court with simple and clear evidence of Ripple’s wrongdoing but still claim to have concluded that the company is guilty. Asked for the proof, they keep alluding to some other data necessary before they can give a complete corpus of evidence.

    In contrast, Ripple’s lawyers have already said how, in their opinion, this whole story began. According to them, in October 2020, a certain XRP token holder contacted the SEC and asked to explain whether he had purchased currency or stocks. The regulator couldn’t give an answer, but it made them wonder about the nature of Ripple’s activities.

    Hence the defense strategy chosen by Ripple’s lawyers. They are not trying to prove XRP is not a security. Instead, they point out that SEC specialists themselves cannot determine the status of cryptocurrencies. And if this is the case, why aren’t they going after, say, the creators of LTC, ETH or ADA?

    Another argument put forward by the lawyers is that Ripple has been active for many years (since 2012, to be precise); their protocols and tokens have been used by various banks and financial companies going back to 2013. Does it mean that the US Securities and Exchange Commission hadn’t noticed any violations until recently and hadn’t even issued a warning? Or had it not considered the work of Ripple to be in breach of anything before suddenly changing tune at the end of 2020?

    In any case, keep in mind that early in this story, Ripple was ready to quickly close the issue by paying a fine. But the SEC did not agree to settle on that and apparently wanted to make this case against one crypto company impact the entire industry. Unfortunately for them, something clearly did not work out with the evidence base.

    What do we have as a result? Justice of the peace Sarah Netburn ruled that the US Securities and Exchange Commission must provide the documents requested by Ripple – but only to the judge herself, who will examine them “behind closed doors”. In the time before September 28, based on the examination’s conclusion, she will decide whether these documents can be revealed to the public or not. Netburn also noted that Ripple had made a “strong case” in favor of disclosing the SEC documents before the court.

    And while the Commission representatives tried to block the judge’s decision, insisting that it would “create a dangerous precedent” for the SEC, they failed: Sarah Netburn declared that Ripple does not receive any undue privileges, for example, in the form of access to documents.

    It likely was the penultimate stage of a rather protracted case. The fact that the SEC itself did not provide proof of its allegations before August 31 suggests that the Commission simply doesn’t have a sufficient evidence base, so Ripple should win the trial without issue. Ironically, the dispute will indeed become a landmark for the crypto industry, just not in the way the SEC wanted.

    For investors, it means that the price of XRP tokens can now stabilize and return to growth. This is excellent news considering that after the case became known to the public in December last year, the price collapsed, and then in 2021, it made crazy jumps from $ 0.21 to $ 1.8 and back. Now one XRP is traded for $ 1.27, and the cryptocoin, despite all the troubles, confidently holds 6th place by capitalization ($ 57.7 billion).

    The developers clearly expect winning in court and a smooth road ahead for their project. What may well boost the project’s further growth is Ripple announcing the launch of a payment corridor between the Philippines and Japan at the end of July. It will use On-Demand Liquidity technology and the XRP token to conduct transactions. The initiative won’t be the first of its kind for the company: at the end of May, a Ripple payment corridor already connected the UAE and Egypt. Such corridors allow fast international transfers with minimal fees – exactly what Ripple specializes in.

    Ripple partnered with the Japanese company SBI Holdings in the effort to connect the Philippines and Japan. The country was not chosen by chance either: Japan is one of the four largest markets for Ripple payment solutions. It is also one of the most promising, as Japan charges some of the world’s highest commissions for international transfers. The average commission is 10.5%, while the average cost of transfers for Canada, the USA, France, and Italy is 5.92%. All this means Ripple solutions, which reduce the cost of transactions by orders of magnitude, are in great demand in the Japanese market.

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