What if Ripple Wins?
Back in December 2020 a move by the United States, Securities and Exchange commission brought legal action on Ripple (XRP)m whom allege that Ripple conducted an unregistered securities offer to the tune of $US1.3 Billion dollars. It was no doubt with figures that high that it was going to cause some waves. It also came at a time that Crypto was rapidly gaining traction in the mainstream media and every day folk.
Although the allegations on XRP are a little different compared to other projects, one of the main issues the SEC had with Ripple is that it offered it's token (XRP) to investors as an offering to raise capital for their business operations.
What is an IPO?
This may not seem to out of the ordinary as this process is called Initial Public Offering (IPO) and it is what many in the business sector do to raise business capital, effectively sell of shares of their business and as the company grows and profits, those profits are distributed to share holders.
To undertake an IPO companies must meet stringent guidelines and legislation that try to limit losses to investors and govern how IPOs are released to the public and cover or mitigate any liability or risk that might be faced.
Ripple has consistently disputed this charge basing it's position on being in a new and emerging sector and arguing that IPO legislation does not apply to Crypto currency and that XRP is not a security as they are not offering investors a return or part of their company.
What is XRP?
The legal battle has raged for quite some time now and the question of What is XRP? isn't just a concern for XRP as many crypto currencies are in this predicament which causes a number of issues of the SEC is successful and a precedent is set.
What exactly is XRP isn't as easy as saying it is or isn't a security because there is no regulation or definitions around crypto currencies currently and it is something governments across the world are struggling with so the case at hand is one that many are watching.
What if Ripple wins?
There is growing support for Ripple being successful in it's case with a recent development in the case creating a conflict between SEC views and opinions around statements made surround a declaration that Bitcoin and Ethereum are not securities.
This has cast some doubt on the SEC which the article above states is Trying to have it both ways and as a result support for XRP has grown with slight price increases.
IF Ripple win's there will be a precedent set and strong support for the crypto currency which could potentially see it return to it's 2017 price points of $5 once again.
But it will also provide certainty for the broader crypto market and with knowledge comes the ability for the sector to move forward. It's anyones guess and the decision won't be finalised until later but everyone is unified in there being an outcome this year.
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