XRP Showing Signs of Recovery after selloff due to SEC Suit
Hello, everybody. Happy Holidays! It's Dec 25 2020 here in Vietnam – Christmas Day. And it looks like Santa has brought XRP investors a nice present, in the form of a modest uptick in XRP's market price.
As anyone who follows cryptocurrency (or #fintech in general) probably knows by now, earlier this week, the SEC filed a lawsuit against the Ripple Company and its top two company officers, CEO Brad Garlinghouse, and Executive Chairman – Chris Larsen.
The suit “alleges” that Ripple operated in Violation of SEC rules by selling XRP as an unregistered security. And it is retroactive to 2013 when Ripple first entered the market. Ironically, It was filed by the SEC Chairman, Jay Clayton against Ripple and its two key agents just one day before Jay Clayton resigned from his post as SEC chairman. So the timing of the matter is curious, to say the least. Especially since Jay Clayton has been the SEC Chairman for the past 8 years. And has had ample opportunity to address the issue during his time in office.
Irrespective of the strangeness of this abrupt move by the SEC Chairman just a day before leaving office, news of the event caused the price of XRP to drop drastically. When all was said and done, XRP plummeted from $0.54 cents to around $0.21 cents in just two days (a decrease of about 43%). And to make matters worse, Bitcoin maximalists and XRP haters took to social media in full force, to bash Ripple and XRP further, while the Company and the token it utilizes (XRP) were already getting inundated with negative news from mainstream media outlets.
Nevertheless, as the trading week in the United States and Europe has finished a day early due to the Christmas holiday. XRP is still showing a positive turnaround on exchanges worldwide. Since traders have likely had a chance to digest the big news of the SEC filing suit against Ripple. And more and more people are waking up to the fact that these allegations by the SEC (namely Jay Clayton) are largely without merit. And that even if XRP were to be declared a “security”, and Ripple and its executives had to pay a huge fine, XRP is not going away. And it certainly is not going to zero, as so many XRP haters want people to believe.
As the chart above clearly shows, even in the face of the biggest SEC suit to ever be lodged against a cryptocurrency, the utility of XRP is what will always give it resilience. Through Ripple's On Demand Liquidity system, XRP is the fastest and cheapest way to send money internationally. There are also other factors that have worked to combat the barrage of negative news that followed the SEC filing.
No other G20 country besides the United States considers XRP anything but a currency. Also, Yoshitaka Kitao of SBI Holdings weighed in of the SEC suit largely in favor of Ripple. Furthermore, Stuart Alderoty, Ripple's General Counsel has expressed his confidence that Ripple will emerge from the matter victoriously. And most importantly, this SEC suit can wind up being a good thing. As it will render the Howey Test – the criteria that that the SEC uses to determine whether or not a financial instrument is a a security – obsolete, and replace it with what may come to be known as “Ripple Test” (claims Stuart Alderoty).
So this whole SEC suit (fiasco) could work out to be a blessing in disguise for Ripple and XRP. Since the end result may well be the regulatory clarity on the status of Ripple that the XRP community has long been waiting for. And that Jay Clayton couldn't successfully determine during his eight year term. Also, XRP may become the new standard against which all other cryptocurrencies are measured.
I say, we've waited long enough. Let the trial begin. As an XRP community member and supporter, I'm confident that XRP will pull through. And based on the recent market activity that the XRP chart above displays, I know that I'm not alone in that sentiment.