Endgame for Ripple, XRP vs SEC is near, but what can you truly expect?

Ripple, XRP vs SEC. Three entities at the center of the crypto-space’s hottest battle.

The timing of a decision in the widely publicized legal dispute between Ripple Labs and the United States Securities and Exchange Commission (SEC) is currently the subject of heightened speculation. While the popular consensus among people following the case, including Ripple CEO Brad Garlinghouse, is that of a resolution by the first half of 2023, it looks highly unlikely given the prevailing uncertainty.

Recently, prominent XRP influencer Mr Huber stirred something up after he cited a “rumor” about Judge Analisa Torres, who is presiding over the case. He claimed that she might not release the ruling before summer 2024. Just last week, a similar rumor floated around stating that Ripple Labs and SEC were holding a meeting behind closed doors. However, it was later categorically denied by Attorney John E Deaton.

While the merits of the rumor are highly debatable, these conjectures reflect the growing anxiety among XRP enthusiasts and wider market participants. Especially those who have been keeping a close eye on the XRP-SEC saga.

Read Ripple’s [XRP] Price Prediction 2023-24

The big confrontation

As per an interview given to CNBC, CEO Garlinghouse said that Ripple will end up spending $200 million by the time the litigation is done. In fact, this was the first public revelation of the the company’s legal expenses.

The controversial lawsuit, which was filed by the SEC in December 2020, has now entered its third year. The SEC alleged that Ripple executives held an initial public offering (IPO) of XRP – An unregistered security at the time of raising capital. According to the complaint, Ripple raised funds by selling XRP tokens as an unregistered security.

In response, Ripple claimed that the SEC was selective in going after XRP as the regulator never warned nor gave any notice to the organization. Ripple maintains the position that the token is used in its business to facilitate cross-border transactions between banks and other financial institutions.

Since the beginning, Garlinghouse has taken potshots at the high-handedness of SEC. And, he has remained confident about the chances of Ripple. In fact, during the recent XRP Las Vegas 2023 meeting, he expressed his gratitude and appreciation to the XRP community for their support during the legal battle against the regulator.

Also, in a recent statement, while highlighting the weakness of SEC’s arguments, Attorney John Deaton called them “far-fetched”, impacting all possible future sales, even in geographies outside of the U.S.

Ripple bets on offshore markets

Ripple Labs has made its intentions clear about expanding its operations outside of the U.S., even relocating in case the verdict doesn’t come in its favor. And, it has started to put its bet on emerging crypto-markets in Asia and elsewhere.

For instance, Ripple announced the opening of its new office in Dubai, UAE, which will function as the headquarters of the Middle East and North Africa (MENA) region. The company believes that the region has been a big market for its on-demand liquidity (ODL) solution, one which facilitates cross-border payments.

In its first-quarter earnings report for 2023, Ripple spoke about the growing demand for ODL in Latin America.

Bitso, the leading crypto-exchange in Latin America, surpassed more than $3.3 billion in transactions between the U.S. and Mexico in 2022. This is a sign of the growing institutional use of cryptocurrencies as a cross-border payment solution.

State of XRPL

The on-chain activity on XRP ledger (XRPL) increased for the second straight quarter, as transactions rose by 9% to 116 million. The hike was powered by strong growth in the non-fungible token (NFT) landscape and decentralized exchange (DEX) trading volumes.

Data from XRP SCAN revealed that about 1.21 million transactions were executed on the blockchain on 8 May. This was the highest value since 17 April when transactions skyrocketed to over 4.2 million.

However, the number of new contracts getting created on the ledger declined steadily – A slight concern as far as adoption is concerned.

Many business insiders are anticipating that the lawsuit would shed much-needed light on the SEC’s ambiguity on what it regards to be a security. In fact, in 2023, SEC has taken similar actions against crypto-platforms like Kraken and Coinbase.

Source: XRP SCAN

Realistic or not, here’s XRP market cap in BTC’s terms

Is 2023 the year for XRP?

The payments-focused crypto had grown by 22% on a year-to-date (YTD) basis until press time, riding on optimism about a favorable outcome in the lawsuit and the larger bullish sentiment in the crypto-market.

A big reason behind the surge is the optimism shown by big whale addresses. For instance, Santiment revealed that addresses holding more than 1,000 XRP tokens have increased steadily since the start of the year. And, the buying spree shows no signs of abating as whale transactions continue to spike.

Source: Santiment

With the hope that Ripple would come out as the winner in the lawsuit, demand for XRP shot up in Futures market in 2023. The Open Interest (OI) surged to $728 million on 30 March, hitting a five-month high.

However, since then, it has progressively declined to $426 million, mirroring the drop in XRP’s price on the charts.

Source: Coinglass