The price of XRP nearly doubled this week, breaking the $1 mark and reaching a three-year high. This price surge is closely related to the legal troubles faced by the U.S. Securities and Exchange Commission (SEC).
Key Points
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The price of XRP broke $1 on Saturday, reaching its highest point in three years.
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The SEC's legal issues may affect its appeal in the Ripple case, which ruled that XRP sales in public trading do not fall under the definition of securities.
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The price surge aligns with recent bullish sentiment in the options market.
XRP broke $1 on Saturday, setting a new three-year high, primarily driven by the legal troubles of the U.S. Securities and Exchange Commission (SEC).
On Thursday, a group of state attorneys general and the Decentralized Finance Education Fund filed a lawsuit against the SEC, accusing the agency of overstepping constitutional boundaries and claiming it exceeded its authority in taking enforcement actions against digital asset exchanges.
The lawsuit was filed in the Eastern District of Kentucky, alleging that the SEC unilaterally claims regulatory authority over cryptocurrencies, classifying them as investment contracts similar to stocks and bonds. The lawsuit argues that digital assets are merely assets and not investment contracts, and that the SEC's actions infringe upon the states' rights to self-regulate the industry.
This lawsuit could have far-reaching implications for the SEC's appeal in the Ripple case, which is one of the main factors affecting the price of XRP.
In December 2020, the SEC sued Ripple Labs, accusing the company of conducting an unregistered securities offering through the sale of XRP, which the SEC considers a security. In July of last year, a U.S. court ruled that XRP sold to institutional investors constitutes a securities transaction, but also determined that XRP sold in public trading does not fall under the definition of securities. In October of this year, the SEC appealed this ruling, seeking further clarification on the legal status of XRP.
The founder of LondonCryptoClub stated that the surge in XRP's price is due to expectations of a more favorable regulatory environment following Trump's election as president.
"XRP is a major beneficiary under the Trump administration, especially with the potential departure of SEC Chairman Gary Gensler, who has embroiled Ripple Labs in legal disputes that may dissipate with his exit," the founder told CoinDesk.
"There are even rumors of a possible meeting between Ripple's CEO and Trump, which further enhances expectations that the regulatory environment will be more favorable for companies and tokens like Ripple."
It is worth noting that XRP's price breaking $1 aligns with bullish sentiment in the options market earlier this week. Additionally, according to data source Coinalyze, open interest in futures surged to a record $1.53 billion. The rise in open interest accompanies the price increase and is typically seen as a signal validating the upward trend.
Sources
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XRP Skyrockets Past $1 as SEC Faces Legal Troubles And Favorable Regulatory Shift Looms, MSN.
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XRP Skyrockets Past $1 as SEC Faces Legal Troubles And Favorable Regulatory Shift Looms, CoinDesk.
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XRP Skyrockets With $1 Million Fund Flows as Ripple v. SEC Ruling Anticipated, U.Today.
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XRP $1 Price Comes Alive for the First Time Since 2021, BeInCrypto.
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Ripple (XRP) Price Skyrockets; Is $1 Dollar Within Reach?, Blockzeit.