Yerevan (CoinChapter.com) – Ripple blockchain’s native token XRP jumped 6.09 percent on June 13. However, the rally halted on concerns that Ripple Labs, Ripple’s parent company, would reach an expensive settlement in a lawsuit filed against it by the US Securities and Exchange Commission (SEC).
SEC vs. Ripple Overview
In hindsight, the SEC filed the said lawsuit in December 2020, accusing Ripple of selling $1.3 billion worth of XRP as unregistered securities. The agency found the blockchain company in violation of the US investment laws and stated that Ripple “cheated investors in the US and around the world.” The company fired back, blaming the SEC of extreme bias, as they never deemed Bitcoin or Ethereum as ‘securities’ and not currencies.
Magistrate Judge Sarah Netburn compelled the SEC to turn over internal documentation containing Bitcoin, Ethereum, or XRP. The said documents would shed light on the agency’s used definitions. However, the SEC is reluctant to hand them over. James K. Filan, an attorney, directly involved in the case, took to Twitter to share the developments on this investigation.
The SEC still refuses to provide any deadlines for presenting the said documents to the court. This secretive behavior, the attorney believes, speaks of the fact that the agency has something to hide.
Furthermore, the blockchain company has Mary Joe White on its side, the former chair at the SEC. Stefan W. Huber, a politician from Zug, Switzerland, hopes that this alliance will greatly help Ripple’s case.
Settlement like EOS?
SEC filed more than 70 other lawsuits and actions against multiple blockchain companies in the past. One of the former targets was Block.one, the company behind the EOS project. In 2019, the SEC ordered the tech company to pay up $24 million in settlement penalty for unregistered ICO (Initial coin offering).
The company was involved in another class-action lawsuit. It saw Block.one agreeing to a $27.5 million settlement to end the court proceedings. The settlement begs the question of the similarities between the lawsuits against Block.one and Ripple Labs.
Much like Block.one, the lawsuit harms Ripple’s opportunities to expand the business. Attorney Jeremy Hogan was vocal on the issue. He stated that more than 96 percent of all SEC lawsuits end in settlement. Mr. Hogan believes that the settlement will include Ripple paying the penalty specifically limited to dates pre-lawsuit. Furthermore, it will give the exchanges the confidence to re-list XRP.
Where is XRP?
XRP traded at $0.89 in the Tokyo session Tuesday. XRP’s explosive rally over the weekend was hampered by the EOS settlement news, which now cast a shadow on Ripple Labs’s case against the SEC would fare.
XRP has an important resistance margin ahead, at approximately $1.04. If the token manages to break out, it could use the said line as support. Moreover, XRP has been testing its 20-day exponential moving average (EMA-20) as resistance, trading below the wave since the infamous crash on May 19.
XRP price depends on the court proceedings and the future fate of Ripple. The fear of an immense settlement penalty halted the recent rally. XRP consolidated around the $0.89 price level. Further developments in the lawsuit will show if the token is ready for another bullish break.