The SEC isn't backing down in its $2 billion demand for fines from Ripple.
Ripple made its arguments using the most recent Binance ruling, saying that XRP sales are not a security if the same logic as Binance applies.
The SEC rejects Ripple's argument, saying that it is misinterpreting the specifics of the Binance case.
The price of XRP dropped by 9% over the last week but is recovering slightly.
XRP could reach $3-$4 if the lawsuit resolves favourably.
Four years after the beginning, the legal battle between Ripple Labs and the US Securities and Exchange Commission continues to rage.
The battle has even intensified this month, with some significant implications for the future of Ripple and XRP.
Here are all of the details.
The battle between the US regulator and Ripple Labs has been about whether the company's 2017 sales of XRP tokens to institutional investors qualify as a security offering.
Years after this, we have the case down to a possible fine of $2 billion in penalties for Ripple.
The SEC was recently in the crosshairs with Binance over its native cryptocurrency's BNB after alleging that it was unregistered security and that the exchange operated illegally in the US.
Recently, however, Judge Amy Berman Jackson of the US federal court ruled in favour of Binance, stating that the cryptocurrency's market sales didn’t count as securities transactions.
Ripple attempted to use this ruling to support its defence in the ongoing legal battle by filing a "Notice of Supplemental Authority," with Binance’s case as a precedent.
In sum, Ripple argues that if Judge Jackson ruled that BNB wasn't a security, then the same logic should apply to XRP.
The SEC, however, has dismissed Ripple’s attempt to draw similarities between both cases, stating that Ripple misinterpreted the Binance ruling.
The regulator argues that Ripple is more focused on the generalized meaning of the Binance lawsuit than its specifics and fails to consider the specific aspects of the Binance case in relation to its own.
Furthermore, the SEC Says that Ripple only used one key point within a 90-page document to argue its position.
If things go truly wrong, Ripple might still have to pay the SEC a staggering $2 billion in fines.
So far, XRP has been hit hard by the news.
According to data from CoinMarketCap, the cryptocurrency is recovering at the time of writing but is still down by around 9% on the weekly timeframe, with a current price of $0.43.
XRP’s price
Interestingly, while there are no guarantees of a full recovery from here, what if the recent drop is an excellent opportunity for buyers to accumulate more XRP at lower prices?
According to Michael, a Twitter analyst, XRP is trading on top of an ascending trendline that has remained unbroken since July 2020.
So, if XRP recovers fully from this (or any other) point, how far up can it go?
Michael says that we might see the cryptocurrency start to climb and even hit the $3 - $4 mark, especially if we see a resolution in the ongoing case.
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