Price alert: Ripple spikes 31%, here's why
XRP cryptocurrency surges in price amidst high-stakes SEC case
The price of crypto currency Ripple (XRP) has surged in recent days, with a significant 31 per cent increase observed between January 13 and 16, 2025.
Ripple has been a subject to a high-stakes case in the US.
Legal battle
On Wednesday (January 15), the US Securities and Exchange Commission (SEC) Securities and Exchange Commission (SEC) escalated its legal battle against Ripple Labs, filing an appeal to challenge a prior court ruling that declared Ripple’s XRP token not inherently a security.
The case continues to shape the regulatory landscape for cryptocurrency in the US, drawing the attention of legal experts, investors, and industry stakeholders.
Case background
The SEC first sued Ripple Labs in December 2020, alleging that the company conducted an unregistered securities offering by selling XRP tokens worth over $1.3 billion.
Ripple argued that XRP was not a security but a decentralised digital asset similar to Bitcoin or Ether.
Landmark decision
In a landmark decision in July 2023, Judge Analisa Torres of the US District Court for the Southern District of New York ruled partially in Ripple’s favour, stating that XRP was not inherently a security when sold to retail investors on exchanges.
While the ruling was celebrated as a major victory for Ripple and the broader crypto community, it also included a mixed verdict: XRP sales to institutional investors did qualify as unregistered securities transactions.
SEC’s grounds for appeal
In its appeal, the SEC contends:
That the court erred in its application of the “Howey Test” — a legal standard used to determine whether a transaction qualifies as an investment contract.
The agency argues that the ruling creates inconsistency in applying securities laws and undermines its ability to regulate the crypto market effectively
Precedent-setter
SEC Chair Gary Gensler has reiterated his position that most cryptocurrencies, excluding Bitcoin, are “likely” securities.
Speaking at a recent conference, Gensler emphasised that the outcome of this case could set a precedent for other enforcement actions targeting crypto companies.
Ripple’s response
Ripple’s legal team has dismissed the SEC’s appeal as an “overreach”, asserting that the July ruling aligns with established legal principles and provides much-needed clarity for the cryptocurrency industry.
Ripple CEO Brad Garlinghouse called the appeal an attempt to stifle innovation, stating: “This is not just about Ripple or XRP. It’s about the future of crypto in the US.”
FACT FILE:
Ripple (XRP) is a digital payment protocol and cryptocurrency designed to facilitate fast and efficient global money transfers. What is Ripple known for:
Fast and low-cost transactions: Ripple boasts transaction speeds of 3-5 seconds, significantly faster than many cryptocurrencies like Bitcoin or Ethereum. It is designed for cost-efficiency, with transaction fees typically less than a fraction of a cent, making it ideal for cross-border payments.
Enterprise adoption: Ripple's payment protocol, RippleNet, has been adopted by numerous financial institutions worldwide, including banks and payment providers. The platform enables real-time settlement and liquidity sourcing, setting it apart as a practical solution for global financial transactions.
Factors contributing to the price surge:
SEC appeal: The SEC's appeal has heightened investor anticipation and speculation surrounding the outcome of the lawsuit.
Ripple's CEO dinner with President-elect Donald Trump: Garlinghouse's meeting with President-elect Trump, who has made public his support for cryptos, has sparked discussions within the XRP community, potentially influencing investor sentiment.
Japan's adoption of XRP ledger: The news that all banks in Japan will adopt the XRP Ledger for cross-border payments has generated significant excitement, highlighting the growing adoption of XRP within the financial industry.
Concern
The case has sparked significant concern within the crypto industry, which fears that a reversal of the ruling could lead to stricter regulatory scrutiny and dampen innovation.
Notably, the Blockchain Association and prominent crypto firms like Coinbase and Kraken have voiced their support for Ripple.
What legal experts say
Legal experts remain divided on the potential outcome of the appeal. Some believe the SEC faces an uphill battle due to the detailed reasoning in Judge Torres’ original ruling.
Others argue that the agency could leverage the mixed verdict to build a stronger case on appeal.
Strategy
John Deaton, a lawyer who represents XRP holders in the case, believes the SEC’s appeal is part of a broader strategy to delay regulatory clarity and discourage crypto adoption.
Meanwhile, attorney James K. Filan has pointed out that the case’s resolution could take several more years, prolonging uncertainty for market participants.
What’s Next?
The appeal now moves to the US Court of Appeals for the Second Circuit, where both parties will present their arguments.
A final resolution remains months, if not years, away. Until then, the SEC’s actions will likely cast a long shadow over the crypto industry’s future in the United States.
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