According to CryptoPotato, Ripple's ongoing lawsuit with the US Securities and Exchange Commission (SEC) over XRP sales could significantly affect the cryptocurrency's value and the wider crypto market. The SEC filed the lawsuit against Ripple over three and a half years ago, accusing it and some of its executives of conducting an unregistered security offering through the sale of XRP. The case has seen numerous developments, with some favoring Ripple.
In July 2023, Judge Torres ruled that Ripple's sales to secondary trading platforms did not constitute offers of investment contracts. The regulator's intentions to appeal the decision were dismissed, and Ripple's CEO Brad Garlinghouse and Executive Chairman Chris Larsen were cleared of all charges. The case entered its trial phase in April this year, and a resolution could be imminent. However, the complexity of the legal process and other factors could potentially prolong the lawsuit indefinitely.
The SEC initially sought a $2 billion fine on Ripple, but the company insisted on no more than $10 million. Recently, the SEC lowered its demand to $102.6 million. The agency stated that Ripple avoids comparing the penalty to the gross profit of the violative conduct, which results in a much larger figure than the $10 million ceiling Ripple insists on.
The lawsuit's outcome could cause significant volatility for Ripple's native token and the entire cryptocurrency market. A decisive win for Ripple could trigger an XRP rally, similar to what was observed after the company's first partial win last year. Conversely, a victory for the SEC could trigger a potential pullback for the crypto sector.