Market Watch

XRP Price Skyrockets Past $1 as SEC Faces Legal Troubles & Favorable Regulatory Shift Looms

XRP surged past the $1 mark Saturday, hitting a three-year high amid the U.S. Securities and Exchange Commission’s mounting legal troubles. The payments-focused cryptocy surged over 27%, reaching a high of $1.27 at one point, a level last seen in November 2021, CoinDesk data show. Prices have nearly doubled this week, boosting the market capitalization to $63.59 billion. On Thursday, a group of state attorneys general and the DeFi Education Fund sued the SEC, alleging unconstitutional overreach, accusing the regulator of overstepping the boundaries in bringing enforcement actions against digital asset exchanges.

The lawsuit filed in the U.S. District Court for the Eastern District of Kentucky said the SEC has unilaterally asserted regulatory authority over cryptocurrencies, classifying them as investment contracts like stocks and bonds. It added that digital assets are just assets and not investment contracts and the SEC’s approach encroaches upon states’ rights to police the industry on their own. The lawsuit could have far-reaching implications, especially on the SEC’s pending appeal in the Ripple case, which is one of the biggest factors impacting XRP’s price.

In December 2020, the SEC filed a lawsuit against Ripple Labs, accusing the company of conducting an unregistered securities offering by selling XRP, which the SEC classified as a security. In July of last year, a U.S. court ruled that Ripple’s XRP sales to institutional investors qualified as securities transactions. However, it also determined that sales of XRP on public exchanges did not fall under the definition of a security. In October, the SEC appealed against this ruling, seeking further clarification on the legal status of XRP. Founders of the newsletter service LondonCryptoClub said that XRP’s surge stems from expectations for friendlier regulation under President-elect Donald Trump’s administration.

“XRP is a key beneficiary of a more friendly administration under Trump and particular from a likely outgoing of [SEC chief] Gary Gensler who has had Ripple Labs tied up in legal battles which could disappear along with his departure,” founders told CoinDesk. “There’s even speculation of a potential meeting between Ripple CEO and Trump reinforcing the sense that the regulatory environment is set to be significantly more favorable to companies and tokens, such as Ripple,” the founders added.
Note that the price surge above $1 is consistent with the bullish positioning in the options market early this week. Besides, it’s accompanied by a surge in futures open interest to a record high of $1.53 billion, according to data source Coinalyze. An uptick in open interest alongside a price rally is said to validate the uptrend.
Terron Gold

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