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This past week, as the crypto market took a brutal beating after the Securities and Exchange Commission's (SEC) lawsuits against Coinbase and Binance left many investors skittish, XRP managed to show strength.
The price of XRP went up from $0.50 to $0.54 last week until it tumbled along with the rest of the crypto market over the weekend.
On Saturday, XRP's price fell by almost 10% only to climb upwards afterward, and it is already around the same level as before the drop. As of writing, XRP is trading at $0.530, up 2.2% in the past 24 hours while managing $1.37 billion in trading volume.
It is actually the only coin among the top 50 cryptocurrencies by market cap, which is in the green by 4.5% in the past week, except for stablecoins and Bitcoin, which is up by 1.7% during this time.
XRP is the native cryptocurrency of the Ripple network that aims to reduce the cost while increasing the speed of transferring money between financial institutions. It is used as a bridge currency for financial institutions exchanging value between multiple fiat currencies.
The $27.6 billion market cap coin is up more than 56% in 2023 so far while being down 84.37% from its all-time high (ATH) of $3.40 hit over five years ago in Jan. 2018.
After consolidating, the XRP price is now facing significant resistance at $0.55. But it's possible the crypto asset will finally be able to surge past this level as XRP enthusiasts prepare for the release of documents critical to Ripple's win in its long-lasting battle with the SEC.
The Big Day!
The William Hinman speech-related documents remain the focal point, with the SEC expected to release the heavily anticipated documents today.
According to Ripple Chief Executive Brad Garlinghouse, it is “well worth the wait” of more than a year and a half to get these docs released.
Ripple's request for “Hinman documents” in discovery was granted in Oct. 2022. But the SEC vehemently campaigned for these documents to remain private, claiming they were deliberative, privileged, and irrelevant to the case.
However, the presiding judge, Judge Analisa Torres, denied SEC's motion to seal the Hinman documents. According to the judge, the public had the right to know since they are relevant to the case.
The documents refer to internal SEC conversations and deliberations regarding a 2018 speech given by former SEC Director William Hinman. In his speech, Hinman said that while Bitcoin and Ether may have started off as securities, over time, they can become more like a commodity once they become sufficiently decentralized.
“Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions,” said Hinman in his speech.
According to Ripple, having these documents unsealed will be critical in providing further insight into XRP's legal status.
The company has been using this speech as an indication that the SEC doesn't view the majors as a security, arguing that XRP shouldn't be considered a security either.
As a result, a Freedom of Information Act request was subsequently filed by Ripple, which would disclose documents and help clarify just how Hinman came to the conclusion that Ether is not a security.
At the time, the regulator claimed that Hinman's speech only represented his personal views and was in no way a testament to the SEC's policy.
The Commission argued that the documents are protected by a statute that grants privacy for internal deliberations. But at the same time, the agency wanted to withhold the documents from public scrutiny. As a result, it filed a “motion to seal,” a formal request to prevent evidence from being available to the general public.
When the judge denied the SEC's motion to seal these documents saying, “they are judicial documents subject to a strong presumption of public access,” Garlinghouse called the decision “Another win for transparency!”
Victory is Coming!
It all started in 2020 when the SEC alleged that Ripple, the creator of XRP, raised more than $1 billion in 2013 through the sale of XRP in an unregistered security offering to investors.
The SEC's charges also named Ripple's current CEO, Brad Garlinghouse, and co-founder and former CEO, Chris Larsen. Instead of settling, Ripple chose to fight the charges.
The court case in the US Southern District Court of New York could determine if XRP is a security or a commodity and decide the future of cryptocurrency regulations. If the SEC wins and Ripple ends up losing the case, it could see a barrage of similar actions against many crypto projects.
As the long-running case continues, Ripple maintains that there are no grounds for the action. CEO Garlinghouse is confident that the legal battle faced by Ripple would conclude in “weeks, not months.”
Stuart Alderoty, Ripple's general counsel, who has constantly been sharing updates and his views about the lawsuit on social media, tweeted on Tuesday that emails and drafts of the speech are now made public which reveals that Hinman has created “greater confusion” in the crypto market with his remarks.
Alderoty further noted that Hinman didn't see a “need to regulate ETH as a security” and then called Ethereum co-founder Vitalik Buterin later that week to confirm “our understanding.”
Previously, Alderoty has said that the Commission has been unable to “satisfy a single prong of the Supreme Court's Howey Test.” The agency uses the test to determine if an asset is an “investment contract” hence, is considered a security.
Interestingly, in the recent SEC lawsuit against the crypto behemoths Coinbase and Binance, the agency didn't name XRP among the cryptocurrencies such as Solana, Polygon, and Cardano listed as securities.
So, with the Hinman docs unveiling, it would clarify just how the SEC classified ETH as a non-security, which could be monumental for Ripple in achieving victory.
Amidst all this, Japanese financial giant SBI Holdings's chairman and CEO Yoshitaka Kitao came in support of Ripple, saying the whole situation around the classification of XRP as unregistered security could come to an end in the next few weeks.
In his speech, Kitao said that he expects XRP prices to rise sharply if the court rules in Ripple's favor and will further increase its overall acceptance in the digital finance world.
Kitao further stated that he expects Ripple to go public via an Initial Public Offer (IPO) as soon as it receives a positive ruling in the case. He added that this move could have significant financial benefits for Ripple stakeholders such as SBI Holdings.
The speculation around Ripple's IPO isn't anything new. In fact, CEO Garlinghouse himself said during an interview at the World Economic Summit 2020 on the subject of an IPO that “We won't be the first, and we won't be the last.” But, notably, the company wasn't fighting a legal battle with the SEC at the time.
Meanwhile, Developments Continue On
Amidst the regulatory crackdown on the crypto industry and Ripple fighting SEC, the company continues to expand its network.
The University of Toronto has announced its plans to start an independent XRP ledger validator through Ripple's University Blockchain Research Initiative (UBRI).
Back in 2018, the company said it would invest $50 million and partner with 17 universities to advance research and development related to the blockchain. Since then, it has increased its commitment to $80 million this year and distributed more than $47 million to its global university partners.
“This newest UBRI partnership helps to grow a program already supporting important blockchain and crypto technology research in Canada while providing students with opportunities to acquire technical skills for a crypto-native career,” the statement said.
The University of Toronto, the largest in Canada by enrollment, joins Toronto Metropolitan University and the University of Waterloo, Ripple's current Canadian UBRI partners.
Talking about the growing interest from crypto projects to move overseas amidst the regulatory crackdown in the US, Eric van Miltenburg, SVP of strategic initiatives at Ripple, said in an interview that with more and more crypto companies looking to build outside of the US, it is “creating evergreen educational opportunities and growing a pipeline of talent to achieve widespread adoption is critical to our industry's long-term success.”
Ripple aims to revolutionize cross-border payments by providing a faster and cheaper alternative to conventional remittance methods.
In a recent exchange on Twitter, Ripple CTO David Schwartz acknowledged a thread by an XRP community member as the entirely accurate description of XRP's true purpose, which talked about the crypto asset being created for the people as “a better BTC for P2P transactions” and to destroy the banks' monopoly and eliminate the intermediaries in the process.
Schwartz then provided clarification as to why the company decided to pivot to payments in 2014, stating it was due to “real” flourishing economic activity on the XRP Ledger's Decentralized Exchange (DEX).
Combined with the growing daily volume on the ledger and no one working on an enterprise payment system that could settle with crypto, the company recognized the potential of XRP Ledger to facilitate payments.
However, they did not want to limit its functionality, and according to Schwartz, the original vision of the XRPL was to be like Bitcoin while natively supporting multiple assets, enabling cross-currency payments, and facilitating exchanges.
In other news, while popular investment products tracking cryptocurrencies diverted millions of dollars from Bitcoin and Ethereum last week, XRP recorded inflows of about half a million dollars, according to a report by CoinShares.
With the latest influx of money, the cumulative inflow in XRP products since the beginning of this year has risen to $4 million.
What's Ahead? Far-Reaching Consequences!
For now, the popular Ripple vs. SEC lawsuit is in focus, and crypto investors are eager to know the final verdict, which will impact not only XRP but also the broad crypto market.
If Ripple emerges as the winner in this legal battle, which has been ongoing for three years now, XRP price will rally strongly, and Ripple can gain mass adoption.
XRP, in that case, would simply become one of the most trusted crypto assets in the market alongside Bitcoin and Ether and may very well help start the next bull market and finally make a new peak this time around.
Moreover, the result of the SEC vs. Ripple lawsuit could change the crypto industry's regulatory landscape.
On the flip side, if the SEC wins, the agency could be the chief regulator for the industry, opening the door to a harsher regulatory environment for crypto in the US.
A subsequent classification of the majority of tokens as securities and fines on a large number of crypto projects could see crypto's return to pure decentralization and an exodus of platforms from the US to more regulatory-friendly countries, which has already started to take place.
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Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.