Ripple-pro lawyer, John Deaton, clarified that XRP is not a security, but it could be considered as such when traded in the primary market. While maintaining his position that digital assets, including Ripple and Bitcoin, are not securities based on the Howey Test, Deaton notes that they may be sold as securities under certain conditions. In this case, the SEC would have to scrutinize each transaction in both the primary and secondary markets.
During the Dubai Fintech Summit, Ripple CEO, Brad Garlinghouse, disclosed that he expects the final court decision to come in six months. Ripple has spent $200 million so far in defending itself against the lawsuit. Garlinghouse called on US authorities to provide regulatory clarity to avoid lagging behind other countries in blockchain technology adoption. He admitted that the lawsuit has been costly and distracting, and it is unfortunate that other companies may have to face the same challenges with the SEC.
Potential Outcomes of the Ripple Lawsuit
Experts predict that the outcome of the Ripple lawsuit could change if it is proven that XRP was sold as a security. In that case, a settlement between the SEC and Ripple could be one of the expected outcomes. Deaton claims that the notion that tokens are investment contracts is false and has not been challenged by the SEC. In the recent SEC vs. LBRY case, the Judge stated that the secondary sales of LBRY tokens are not considered security sales.
Ripple CEO Remains Optimistic About Crypto Ecosystem
Garlinghouse is optimistic about the crypto ecosystem’s long-term prospects as its utility and problem-solving abilities increase significantly. However, XRP’s current market sentiment is bearish, and it has fallen by 6% in the last seven days, trading at $0.425587. Nevertheless, if Ripple emerges victorious in the lawsuit, XRP’s price could potentially surge and reach its previous all-time high of $3. Ripple chose DIFC as its Mena headquarters’ location in 2020, signaling its commitment to expanding its presence in the region.
Ripple’s Lawsuit Will Have Far-Reaching Consequences for the Cryptocurrency Industry
The Ripple lawsuit has far-reaching implications for the cryptocurrency industry, and its outcome will be closely watched by investors and regulators alike. If Ripple emerges victorious, it could set a precedent for other cryptocurrency companies that have faced similar legal challenges in the past. However, if the SEC wins the case, it could lead to stricter regulations and scrutiny of other cryptocurrencies, potentially hampering their growth and adoption. Either way, the outcome of this case will shape the future of the cryptocurrency industry and determine how it is regulated and perceived by investors and the general public.