XRP, the native token of Ripple, has suffered a significant setback in the past month. Its value has plummeted by around 40%, currently trading at $0.5052. Notably, it even reached a low of $0.476 earlier, wiping out all the gains it had made following a favorable ruling from the SEC in its legal battle with Ripple.
This sharp downfall hasn’t gone unnoticed by prominent figures in the cryptocurrency community. Keith McCullough, CEO of Hedgeye Risk Management, an asset class research firm covering various areas including cryptocurrencies, took a dig at XRP holders on social media platform X (Twitter).
Bitcoin—the leading digital asset—has also experienced a drop below $26,000 due to a controversial post published by Bitcoin Magazine that quickly went viral. The post falsely claimed that Elon Musk’s SpaceX had sold its entire Bitcoin holdings worth $373 million.
However, The Wall Street Journal—originally responsible for the story—later corrected this misinformation and clarified that SpaceX only reduced the value of its Bitcoin holdings from 2022 onwards. Nonetheless, the post from Bitcoin Magazine, faced severe criticism for spreading fear, uncertainty, and doubt (FUD) among crypto investors.
XRP Struggles To Recover From Legal And Market Woes
XRP’s decline in performance can be attributed to both the overall bearish trend impacting most cryptocurrencies in recent weeks and the specific challenges arising from Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC).
The SEC alleges that Ripple and its executives conducted an unregistered securities offering amounting to $1.3 billion through the sale of XRP tokens since 2013. Nevertheless, Ripple denies these claims, asserting that XRP serves as a medium of exchange for facilitating cross-border payments rather than being classified as a security.
This lawsuit has spanned nearly a year, characterized by numerous unexpected developments. In July, a federal judge ruled partially in favor of Ripple by determining that three out of four categories of XRP transactions did not involve securities and thus could not be subjected to SEC enforcement actions.
However, despite this ruling, the SEC remains persistent and has recently filed for an interlocutory appeal to challenge the judge’s decision regarding non-securities transactions. Citing flawed factual findings and legal conclusions, the SEC believes that endorsing this ruling may impact other pending cases involving digital assets.
Conversely, Ripple opposes this motion and maintains confidence in its legal position while aiming for a potential resolution under new leadership at the SEC following Gary Gensler’s appointment as chairman in April.
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