What happens now in Ripple? Subject matter what do the experts say?
The U.S. Securities and Exchange Commission (SEC) announced yesterday that it was formally suing Ripple. The case could take years and Ripple could reach a settlement. What do experts on the subject say about this development that preoccupies the market agenda?
The official announcement from the SEC came hours after Ripple CEO Brad Garlinghouse announced yesterday that he would be suing Ripple by the SEC.
According to the statement, the SEC accuses Ripple and CEO Garlinghouse and co-founder Chris Larsen of engaging in $ 1.3 billion of unregistered securities sales. Here, the asset that is an unregistered securities is XRP.
The SEC had previously accused EOS of selling unregistered securities, but the settlement was settled with a $ 24 million penalty. In contrast to EOS’s case, two executives were sued here, as well as Ripple.
According to Jake Chervinsky, a leading lawyer in Blockchain and cryptocurrency, the development is pretty bad for Ripple. Chervinsky testified that since the charge was not a securities fraud, it was not the worst-case scenario, but he was close to it. “If XRP is considered a securities, it becomes redundant, “Chervinsky said. The alleged breach to date is a fatal blow. The accusations against executive individuals are also notable. The SEC is playing hardball., ” he said. In addition, Chervinsky noted that if XRP is considered a securities, it would most likely mean that no transactions can be made with anyone doing business in the United States.
Meanwhile, money transfer company MoneyGram, an important business partner of Ripple, also told CoinDesk that the situation would continue to be monitored. The company is taking a wait-and-see approach for the time being.
Exchanges may be forced to list
It could take years for the case to reach its conclusion. Some experts say the exchanges could be forced out of the list if the SEC proves in court that XRP is a securities. Because currently, most exchanges do not have the authority to buy and sell securities.
Speaking to CoinDesk about the issue, Messari research analyst Ryan Watkins said: “a lot of stock markets are going to want to take it off the list. Therefore, it will be able to establish liquidity. In this scenario, the price of XRP will fall sharply.” said.
Alex Kruger, on the other hand, said, “XRP is unlikely to be removed from the list on SEC developments. The news represents some of the voices that will come out in the short term. As long as the price goes. I think for a while XRP will perform at the lower level. Market participants, of course, are concerned and we see this, especially on the side of senior investors,”
John Willock, CEO of tritum, also noted that if XRP is considered a securities, it is very likely that many exchanges and market participants will not be traded on the ground, and such a giant market liquidity and sudden loss of its participant will lead to a huge decline in the asset.
Willock also said that few among cryptocurrency investors would accept the complexity and risk that investing in an asset that is considered securities brings.
OKEx CEO: clearly we will see a big sale in XRP
Jay Hao, CEO of Malta-based giant cryptocurrency exchange OKEx, also agreed with this comment and said, “it is clear that we will see a big sale in XRP and a sharp drop in price.” Hao did not respond to a question about whether they would delist him if XRP was considered securities.
Experts note that corporate companies that have recently invested heavily in the cryptocurrency universe are concentrating more on Bitcoin and Ethereum, while the money in XRP comes from smaller investors. So if the exchanges stop supporting XRP, the biggest 3. it is commented that cryptocurrency can not be bought and sold by this audience in any way.
Ripple may settle with SEC
Still, experts say the SEC development is not a fatal blow for XRP.
Regarding the matter, Willock said, ” there are several ways in which the SEC will accept a settlement payment from Ripple. This, in turn, will seriously reduce the impact of the impact.” said.
Similarly, Hao noted that the adoption of XRP securities will probably have a positive impact on the declining price:
“This can enable XRP to be listed on traditional exchanges and thus spread to a wider market. This, in turn, will have a positive impact on the price in the long run”
XRP was developed in 2012 by Ripple Labs co-founders Arthur Britto, Jed McCaleb, and technologist David Schwartz, who donated the bulk of his own token rights to the project. Ripple’s company has sold about 1.2 billion XRP since then, according to Messari.
Finally, according to Ripple CEO Brad Garlinghouse, XRP’s future is independent of the company. “Even if the Ripple company doesn’t exist, XRP will still be around with a few hundred exchanges, “Garlinghouse said. Here in the US and in many parts of the world, there are entrepreneurial and innovative people who have built more than 100 different projects on top of XRP,” he says.