XRP Price Dips as Ripple Loses Bid to Leverage Binance Ruling

A years-long legal battle between Ripple and the SEC over XRP’s status reaches a critical point, impacting XRP’s price.

Man pulling his hair and sitting on a red sofa beside a gorilla in front of huge Ripple XRP coins.
Created by Kornelija Poderskytė from DailyCoin
  • Ripple Labs has been locked in a legal fight with the SEC.
  • The SEC has rejected Ripple’s arguments.
  • A $2 billion fine from the SEC remains a possibility.

For over three years, Ripple Labs, the company behind XRP, the world’s seventh-largest cryptocurrency, has been in a David-and-Goliath battle with the US Securities and Exchange Commission (SEC). The issue is whether XRP is a security subject to strict regulations or a currency free to trade.

This technical dispute has significant consequences that could affect not just the future of XRP but the entire crypto industry in general. As would be expected, these recent developments have already shaken the XRP community. Emboldened by a court victory for cryptocurrency exchange Binance, Ripple tried to use that ruling to argue that XRP is not a security. 

Ripple Seeks Clarity After SEC Rejects Proposal

The SEC swiftly rejected this move, disrupting Ripple’s strategy and leaving XRP’s fate uncertain. This news triggered a 9% price drop for XRP, reflecting not just the regulatory uncertainty but also broader market pressures. 

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Yet, some analysts see this as a buying opportunity. With a potential verdict looming in July, a ruling in Ripple’s favor could send XRP prices soaring. This news comes after Binance scored a win against the SEC on July 2. Judge Amy Berman Jackson ruled that the purchase of Binance’s native token, BNB, on the secondary market did not constitute a security offering. 

This decision echoed a similar ruling last year by Judge Analisa Torres, who found that crypto purchases on secondary markets generally don’t meet the criteria for classification as securities under the Howey Test.

Emboldened by Binance’s success, Ripple Labs filed a Notice of Supplemental Authority with Judge Torres. They argued that the SEC’s inconsistent rulings on BNB and XRP demonstrated a lack of clear regulatory guidelines. Ripple urged the SEC to establish formal rules for classifying cryptocurrencies as securities.

XRP Price Slumps After SEC Filing

The SEC countered by pointing out that Ripple cherry-picked a single observation from the lengthy Binance ruling to advance its position. The regulator highlighted that the court did identify other violations in the Binance case, suggesting that Ripple’s legal troubles may not be entirely over. 

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If the lawsuit concludes, this could potentially mean upholding the proposed $2 billion fine against Ripple. The news sent shockwaves through the XRP community, leading to a 9% drop in price within the last 24 hours. XRP is currently trading at $0.41, reflecting not just the SEC’s decision but also broader bearish market pressures.

Despite the current slump, some analysts view it as a buying opportunity. With the Ripple vs. SEC case nearing its conclusion, XRP may rally to $6. This recent price dip could be an attractive entry point for investors looking to accumulate XRP at a discount.

On the Flipside

  • Though the Binance ruling is a positive development, the SEC argues it doesn’t directly apply to Ripple’s situation.
  • Even if XRP itself isn’t deemed a security, Ripple could still face fines for past sales the SEC considers unregistered offerings.
  • The XRP price drop reflects not only the SEC case but also a general bearish trend in the current market.

Why This Matters

The SEC’s rejection of Ripple’s argument using the Binance ruling throws a wrench into Ripple’s strategy and reignites uncertainty over XRP’s classification. This ambiguity not only impacts XRP’s price but also sets a precedent for how the SEC might regulate other cryptocurrencies, potentially affecting the entire crypto market’s future.

If you like this article, you will probably also like this article about the legal battle between Ripple and the SEC here:
Ripple Verdict Takes Shape as SEC Makes Their Move

Curious about the possible dates in July that could bring a verdict on the legal battle between Ripple and the SEC? This article here discusses exactly that:
Ripple’s SEC Ordeal to End in July?! Two Key Dates Arise

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Kyle Calvert

Kyle Calvert is a cryptocurrency news reporter for DailyCoin, specializing in Ripple, stablecoins, as well as price and market analysis news. Before his current role, Kyle worked as a student researcher in the cryptocurrency industry, gaining an understanding of how digital currencies work, their potential uses, and their impact on the economy and society. He completed his Masters and Honors degrees in Blockchain Technology within Esports and Business and Event management within Esports at Staffordshire University.