Ripple and the SEC
Ripple Labs has been embroiled in a legal battle with the US financial watchdog for more than two years now. The SEC believes that Ripple Labs has made an illegal securities offering with XRP. In the financial world we speak of a security if a financial object carries with it a certain profit expectation, which depends on the performance of a company or company.
In the case of the XRP token, the SEC believes that Ripple Labs did make agreements with the investors or at least made promises to try to make the token more valuable. That results in an investment contract and, according to the SEC, that is enough to qualify the XRP token as a security. If it is right about that, there is a good chance that it will soon be done with XRP.
The end of XRP?
If the SEC wins this case and is allowed to label the XRP token as a security, then all crypto exchanges in America will never be allowed to sell the token again. It is not allowed to list securities without a license. Only so-called utility tokens, which do not have a profit expectation based on business activities, are allowed. There are those who say that only Bitcoin would eventually fall under this.
If that happens, XRP’s story will be over at least in America and, according to some, maybe all over the world. It is also possible that other tokens will run into problems. It is eerily quiet around XRP in the run-up to the next session in the courtroom. The updates are not forthcoming, while the next session is scheduled for December 22, and that uncertainty does little good for the price at the moment.