XRP Price Dips as Ripple Loses Bid to Leverage Binance Ruling

• Ripple Labs has been locked in a legal fight with the SEC.
• The SEC has rejected Ripple’s arguments.
• A $2 billion fine from the SEC remains a possibility.

For over three years, Ripple Labs, the company behind XRP , the world’s seventh-largest cryptocurrency, has been in a David-and-Goliath battle with the US Securities and Exchange Commission (SEC) . The issue? Whether XRP is a security subject to strict regulations or a currency free to trade.

This technical dispute has significant consequences, potentially affecting the future of XRP and the entire crypto industry. Recent developments have shaken the XRP community. Emboldened by a court victory for cryptocurrency exchange Binance , Ripple tried to use that ruling to argue that XRP is not a security. 

Ripple Seeks Clarity After SEC Rejects Proposal

The SEC swiftly rejected this move, disrupting Ripple’s strategy and leaving XRP’s fate uncertain. This news triggered a 9% price drop for XRP, reflecting not just the regulatory uncertainty but also broader market pressures. 

Yet, some analysts see this as a buying opportunity. With a potential verdict looming in July, a ruling in Ripple’s favor could send XRP prices soaring. This news comes after Binance scored a win against the SEC on July 2. Judge Amy Berman Jackson ruled that the purchase of Binance’s native token, BNB , on the secondary market did not constitute a security offering. 

This decision echoed a similar ruling last year by Judge Analisa Torres, who found that crypto purchases on secondary markets generally don’t meet the criteria to be classified as securities under the Howey Test.

Emboldened by Binance’s success, Ripple Labs filed a Notice of Supplemental Authority with Judge Torres. They argued that the SEC’s inconsistent rulings on BNB and XRP demonstrated a lack of clear regulatory guidelines. Ripple urged the SEC to establish formal rules for classifying cryptocurrencies as securities.

XRP Price Slumps After SEC Filing

The SEC countered by pointing out that Ripple cherry-picked a single observation from the lengthy Binance ruling to advance its position. The regulator highlighted that the court did identify other violations in the Binance case, suggesting that Ripple’s legal troubles may not be entirely over. 

This could potentially mean upholding the proposed $2 billion fine against Ripple if the lawsuit concludes. The news sent shockwaves through the XRP community, leading to a 9% drop in price within the last 24 hours. XRP is currently trading at $0.41, reflecting not just the SEC’s decision but also broader bearish market pressures.

Despite the current slump, some analysts view this as a buying opportunity. With the Ripple vs SEC case nearing its conclusion, XRP could potentially rally to $6. This recent price dip could be an attractive entry point for investors looking to accumulate XRP at a discount.

On the Flipside

• While the Binance ruling is a positive development, the SEC argues it doesn’t directly apply to Ripple’s situation.
• Even if XRP itself isn’t deemed a security, Ripple could still face fines for past sales the SEC considers unregistered offerings.
• The XRP price drop reflects not only the SEC case but also a general bearish trend in the current market.

Why This Matters

The SEC’s rejection of Ripple’s argument using the Binance ruling throws a wrench into Ripple’s strategy and reignites uncertainty over XRP’s classification. This ambiguity not only impacts XRP’s price but also sets a precedent for how the SEC might regulate other cryptocurrencies, potentially affecting the entire crypto market’s future.

If you like this article, you will probably also like this article about the legal battle between Ripple and the SEC here:
Ripple Verdict Takes Shape as SEC Makes Their Move

Curious about the possible dates in July that could bring a verdict on the legal battle between Ripple and the SEC? This article here discusses exactly that:
Ripple’s SEC Ordeal to End in July?! Two Key Dates Arise