Ripple’s XRP token had been performing very well in 2020, reaching as high as $0.34 in mid-February, before pulling back to just under $0.30. Unfortunately, it wasn’t immune to the losses which have hit virtually the entire crypto-space this week. So what could be holding it back from recovering now?
Ripple Case Not Dismissed
A federal judge in California yesterday ruled that the class action lawsuit being pursued against Ripple could not be dismissed. A group of investors are suing the company, claiming that they lost money selling XRP after being ‘tricked’ by Ripple’s promotional statements.
The judge did dismiss certain claims, but Ripple had requested that the case be thrown out entirely, due to it being filed over five years after XRP was first offered in 2013.
The investors will now get a chance to take Ripple to court for selling unregistered securities. Ripple themselves said that this “would upend and threaten to destroy the established XRP market more broadly.”
XRP Securities Status Still Unknown
Speaking of unregistered securities, the US Securities and Exchange Commission (SEC) has still not made a decision as to whether it classes XRP as a security. Should it eventually take the position that the Ripple asset is not a security, then this should also negate the class action lawsuit.
The SEC has certainly been taking its time with the decision. Back in June 2018, it classed Bitcoin and Ether as currencies and not securities, but was undecided on XRP.
At the time, some believed that a ruling by the Financial Crimes Enforcement Network (FinCEN) in 2015 allowing Ripple to continue selling XRP tokens, meant that the SEC could not then classify them as securities.