Ripple and SEC End Legal Dispute, XRP Surges Amid BlackRock ETF Speculations
By: Eva Baxter
Ripple Labs and the US Securities and Exchange Commission (SEC) have officially ended their long-standing legal feud, a significant development that concludes a high-profile case which had far-reaching implications for the cryptocurrency industry. This resolution marks the end of an adversarial relationship that started back in December 2020 when the SEC accused Ripple of conducting unregistered securities offerings worth $1.3 billion. In their joint filing on August 7, both parties agreed to withdraw their appeals, with Ripple’s Chief Legal Officer, Stuart Alderoty, affirming that the case was now closed.
This settlement, which stopped Ripple from making institutional XRP sales without complying with securities laws but did not classify XRP sales on public exchanges as securities, is heralded as a victory for Ripple. According to Alderoty, the resolution allows the company to resume regular business operations, marking a significant step forward for Ripple that parallels similar resolutions achieved by other crypto firms.
The legal drama’s conclusion had an immediate positive impact on XRP's market performance, with its price surging by over 10% to reach $3.33, driven by renewed investor confidence. The trading volume reportedly increased by more than 100% within a day, signaling increased market activity. Analysts attribute this surge to the newly secured legal clarity around XRP’s status, suggesting a restored investor faith now that the ‘legal cloud’ over Ripple has dissipated.
In the backdrop of the settlement, speculations are rife about BlackRock's potential launch of a spot XRP exchange-traded fund (ETF). BlackRock, already a significant player in crypto ETFs linked to Bitcoin and Ethereum, could be considering expanding its offerings to include XRP, especially now that regulatory uncertainties have been removed. Although experts like Nate Geraci from NovaDius Wealth see this move as plausible, primarily because excluding other digital assets might imply they lack long-term value, skepticism remains. Bloomberg’s Eric Balchunas, while optimistic about an XRP ETF's approval, suggests that BlackRock might remain focused on its existing successful crypto products, perceiving diminishing returns from further expansions.
Overall, the Ripple-SEC settlement is celebrated as a positive indicator for the crypto industry, reflecting a shift in regulatory attitudes, as evidenced by recent changes in leadership at the SEC under the new administration. It is seen as a precursor to potentially more favorable environments for cryptocurrencies in the US, with Ripple's CEO Brad Garlinghouse and analysts indicating this outcome aligns with broader regulatory easing and increased market enthusiasm.
