NEW YORK — The ongoing legal battle between Ripple Labs and the Securities and Exchange Commission (SEC) continues to capture significant attention in the cryptocurrency community. The tension heightened recently when Judge Analisa Torres denied a joint motion to dismiss the case, allowing the lawsuit, initiated in 2020, to progress further through the courts.
Following the ruling, XRP, Ripple’s native cryptocurrency, swiftly lost over $2 billion in market capitalization within just one day. However, attorney Fred Rispoli, a supporter of Ripple, expressed confidence that this latest legal development does not jeopardize XRP’s status or its potential for approval as an exchange-traded fund (ETF).
Rispoli remarked that the rejection of the motion shouldn’t influence XRP’s performance on secondary markets, which is crucial for ETF considerations. He argued that despite the negative headlines, there is no substantial legal obstacle preventing the SEC from moving forward with a spot XRP ETF. According to Rispoli, the existing injunction is only significant if the SEC chooses to enforce it, leaving open the possibility that the commission could opt to lift these restrictions.
Behind the scenes, there are indications that Ripple and the SEC may be inching closer to a quiet settlement. This could involve Ripple accepting a reduced fine and altering its institutional sales methods. Such a resolution would not only maintain the original ruling by Judge Torres but also help mitigate ongoing regulatory pressures.
Ripple is already adapting its strategy, with its legal team now describing past regulatory violations as “historic institutional sales.” This shift appears aimed at differentiating their current business activities from earlier practices that raised compliance issues.
In a positive sign for those in the ETF market, analysts Eric Balchunas and James Seyffart from Bloomberg report that the chances of XRP, along with Solana and Litecoin, getting spot ETF approvals in 2024 are above 90%. This optimism suggests increased engagement from the SEC with potential ETF issuers.
If this momentum continues, Rispoli’s optimism regarding the ETF remains plausible, despite the ongoing legal complexities. The final outcome of the Ripple case could have major implications for XRP and the broader cryptocurrency landscape.
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