For blockchain innovator Ripple Labs (CRYPTO: XRP), the past two years have been fraught with uncertainties on account of the Securities and Exchange Commission (SEC) action in December 2020 regarding $1.3 billion of capital raised by the company’s co-founder Chris Larsen and current CEO Brad Garlinghouse.
Despite the company’s relentless drive to innovate enterprise-grade solutions for businesses that are faster and more cost effective than traditional financial services, its native token continued to trade significantly lower than its all-time high of $3.03 reached in 2017.
With recent developments indicating the crypto community is standing up against the SEC in support of Ripple, investors are once again turning optimistic about the price appreciation potential for the platform’s native crypto token.
The Overhang Of SEC’s Action Against Ripple Labs
In December 2020, the SEC filed an action against Ripple Labs, Larsen and Garlinghouse alleging that they raised funds through an unregistered securities offering of its native XRP token to investors in the U.S. and across the world.
Since this resulted in an alleged violation of the registration provisions of the Securities Act of 1933, a judgement against Ripple Labs would have effectively set a precedent that would result in similar crypto tokens being classified as securities rather than currencies. Thus, not only is this case important for Ripple, but also for the entire crypto community at large, including entrepreneurs, investors and even law enforcement agencies across the world.
Coinbase Coming Out In Support Of Ripple
Even though many crypto exchanges delisted the XRP token in the aftermath of the SEC’s action, cryptocurrency exchange Coinbase Global Inc (NASDAQ:COIN) has now filed an amicus brief supporting Ripple Labs against the enforcement action pursued by the SEC.
In its brief, Coinbase stated that in the absence of a regulatory framework for crypto tokens and other digital assets, Ripple Labs has the right to a fair notice defence and reiterated such actions absolve the SEC from its main role of formulating rules for the cryptocurrency sector.
While Coinbase’s advocacy for Ripple Lab's actions may not seem significant as such, the fact it was one of the first cryptocurrency exchanges that delisted the XRP token indicates that support for Ripple Labs has changed and is growing.
See Also: $500B Asset Manager Apollo Introduces Crypto Custody For Institutional Clients
XRP’s Price Action Indicated A Bullish Crossover
The world’s eighth-largest cryptocurrency by market cap, XRP has broken out of a six-month price range and is showing promising signs of a bullish reversal.
If Ripple Labs wins its battle with the SEC, the ensuing buying frenzy could take its XRP token to new heights.
The immediate resistance level stands at $0.88, while a breach above it could propel XRP to levels higher than $1.3.
What’s even more promising is that a slew of projects relying on XRP are hitting the market, despite the attention that it continued to receive due to the SEC’s action.
Notably, the company’s former chief technology officer and founder of Coil Stefan Thomas announced he was developing a peer-to-peer micropayments network using XRP to settle transactions.
This should spur demand for the XRP token and propel its prices higher, boosted by a possible judgement in favour of Ripple Labs in the SEC lawsuit.
Even though Ripple continues its fight with the SEC, it is important to understand that this lawsuit has far-reaching implications for the entire crypto industry.
With large players such as Coinbase coming out in support of Ripple and even urging the SEC to clarify many grey areas that still exist today, it seems likely that the worst is over for Ripple and prospects for its XRP token have once again started to look bright.
Add to this the resurgence of bullish investor sentiments surrounding XRP and it wouldn’t be surprising if the XRP token ended up being the best-performing cryptocurrency in the short term.
Read Next: Following Musk's Tweet, 169 New DOGE Contracts Created On Ethereum Cost Investors Thousands of Dollars Amid Meme Coin's Rally
CLICK HERE to sign up for Benzinga's Future of Crypto on Dec. 7 in New York City! It will be the BIGGEST day of the year for crypto enthusiasts, entrepreneurs, investors and networkers to discover the #1 crypto ideas you can use today — directly from hundreds of industry insiders and dozens of project creators.
Photo: Ira Lichi via Shutterstock
