xrp cryptocurrency price

XRP Price Update As Ripple Cryptocurrency Hits $1 Amid SEC Lawsuit

Ripple coin
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Cryptocurrency XRP hit $1 on Tuesday morning EST amid a price rally that has seen each coin increase in value by more than 38 percent in the past 24 hours and more than 72 percent in the past week.

It raised the total value – or market capitalization – of all XRP tokens in circulation to over $45.5 billion. That has fallen to $42.4 billion at the time of writing.

According to price-tracking website CoinMarketCap, XRP has temporarily become the world’s fourth most valuable cryptocurrency by market capitalization, narrowly ahead of other cryptocurrency Tether. Tether surpassed XRP again later in the morning as the price of the latter started to drop below $1.

The price increase comes amid an ongoing lawsuit involving Ripple Labs – the developer behind XRP – and the Securities and Exchange Commission (SEC).

Over the weekend, Ripple won a bid to prevent its emails from going public amid the lawsuit, but it’s not clear if that’s the only reason for the price hike.

Previous pessimism surrounding the price of XRP could be US-centric, according to crypto news site Coindesk, although the coin has been suspended from several Western trading platforms amid regulatory concerns, some exchanges elsewhere in the world are still trading it.

What is the lawsuit?

The Securities and Exchange Commission (SEC) announced that it filed a lawsuit against Ripple Labs and two of its executives in December 2020, alleging that XRP was a security and that the company raised more than $1.3 billion through the sale of XRP tokens, which the SEC has designated as an “unregistered, ongoing digital asset stock offering.”

“The complaint alleges that the defendants failed to register their XRP offerings and sales or meet any exemption from registration, in violation of the registration provisions of the federal securities laws,” it adds.

Other popular cryptocurrencies such as Bitcoin and Ethereum are not treated as securities by the Securities and Exchange Commission (SEC) on the grounds that they are not under the control of any central entity – they are called “decentralized”.

Bitcoin and Ethereum are also gradually minted over time in a process known as “mining,” whereby cryptocurrency enthusiasts essentially create tokens using computing power.

Meanwhile, all 100 billion XRP tokens were created at once by Ripple in 2012. Ripple also controls a large portion of the existing XRP tokens, which has led to the debate over whether or not the cryptocurrency is decentralized.

Ripple is said to have put about 55 billion XRP into an account and periodically release some of it on the open market. About $45.4 billion is currently in circulation.

XRP tokens should not be confused with Ripple itself. The tokens were created as a currency to facilitate financial transactions through Ripple’s digital payment network that banks and other financial institutions can use to send money. The network is known as RippleNet.

An image of a visual representation of the gold and silver token XRP, taken in January 2021 in Katowice, the Netherlands.
Yuriko Nakao/Getty Images

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