XRP, a cryptocurrency originally launched by the founders of crypto payments company Ripple, is up 11% early Friday morning after a strong week of gains – and investor hopes that the SEC’s lawsuit against Ripple could be coming to an end.
Today’s trading of XRP has cooled off a bit since then and is up 3% on the day. But that’s still enough for a sharp 44% surge over the past seven days, now back in the top six coins by market cap, despite a general plunge in the crypto market. Bitcoin is back below $19,000 while Ethereum is down another 12.8% amid its post-merger sell-off.
The price pump for XRP follows news earlier this week that both Ripple and the SEC have filed summary judgment motions in the $1.3 billion lawsuit, each seeking to dismiss the lawsuit before the trial and the judge ask them to decide in their favour. The SEC filed charges against Ripple in December 2020 for allegedly conducting an unregistered securities sale when selling XRP.
In a memorandum accompanying its filing, Ripple argued that it granted no rights to XRP holders during its token sale and that the company has no obligation to act on their behalf.
“The filings show that the SEC is acting outside of its legal boundaries,” Ripple’s general counsel, Stu Alderoty, said in a statement. “The SEC isn’t trying to enforce the law — it’s trying to rewrite the law in hopes it can unduly expand its jurisdiction.”
In contrast, the SEC claims that XRP meets the criteria of a security under the Howey Test — a measure used since the 1930s to determine whether an asset qualifies as an investment contract under U.S. federal law. The regulator claims that XRP buyers expect to make a profit after purchasing the coin and that purchases would be tantamount to investing in a common venture.
Ripple CEO Brad Garlinghouse appeared on Fox Business this week on the price of XRP and its relationship to the Ripple lawsuit.
“Before the SEC got involved with us and ETH, XRP was the second most valuable digital asset ahead of ETH,” he emphasized.
Garlinghouse said Ripple expects there will be no trial as the facts of the case “are not really in dispute,” he said.
“We believe [the judge] has the information it needs to make a decision, and we think it’s very clear that the SEC is grossly overstating its authority,” he said.