Will Ripple Cryptocurrency Continue to Exist Post-SEC Lawsuit Loss?

Ripple CEO, Brad Garlinghouse, has stated that the company may consider relocating to another country if it loses the legal battle currently being fought with the U.S. Securities and Exchange Commission (SEC). This move highlights the significant impact such a legal setback could have on the company and its cryptocurrency, XRP.

Primary Trading Outside the U.S.

Despite the potential legal battle, XRP, the digital asset primarily traded by Ripple, is primarily traded outside the United States. This is due to greater regulatory clarity in other developed markets. In the U.S., it is the only place where a regulator has classified it negatively. Even there, the U.S. Department of Justice and the Financial Crimes Enforcement Network (FinCEN) declared XRP to be a currency in 2015.

Decentralized and Popularity Among Retail Investors

XRP is a completely decentralized network, a fact that even its critics may struggle to admit. It is held in significant quantities by retail investors, indicating its popularity and decentralization.

Potential for Continued Existence of XRP

It is highly likely that XRP will continue to exist, even if Ripple loses the lawsuit with the SEC. This is based on the following points:

1. XRP is Not Directly Sued

It is important to note that the SEC is not suing XRP directly. Instead, the lawsuit is against Ripple, the parent company of XRP, and two of its directors, Brad Garlinghouse and Chris Larsen. The allegations against Ripple and its directors are different, which means the outcome may differ for the company and the individual directors.

2. Complex Legal Outcome

The legal outcome could be complex, especially if the case settles. The SEC’s own lawyer has stated in court that XRP held by retail investors and exchanges is exempt from securities law, hence a non-security. A settlement could give the illusion of the SEC winning through fines, while legally declaring XRP a non-security and limiting Ripple’s XRP sales.

3. Perception of Victory and Defeat

Winning or losing the case may not be straightforward. Even without the directors, the outcome for Ripple alone could be complicated. Winning might appear like a loss and vice versa, making the situation more convoluted.

Conclusion

While the future of Ripple and its cryptocurrency XRP remains uncertain, the decentralized nature of XRP and its substantial presence among retail investors indicate a strong likelihood of its continued existence, regardless of the legal outcome of the SEC lawsuit.

Note

The views and opinions expressed above are personal and not representative of investment advice or marketing.