Trump's election victory has driven a surge in the cryptocurrency market, with investors betting that the Trump administration will establish policies favorable to the growth of the cryptocurrency industry. Furthermore, current SEC Chair Gary Gensler announced this morning (22nd) that he will resign on January 20 next year, further fueling market optimism.
XRP surges
With the SEC chair about to change, the long-standing Ripple case is showing more positive developments. According to Coingecko data, XRP surged more than 25% today to $1.39, marking a new high since April 2021, with a total increase of 151.6% over the past 14 days.
Ripple, the issuer of XRP, has been embroiled in a lawsuit with the SEC since December 2020, with the SEC accusing Ripple of raising $1.3 billion through unregistered securities, XRP, since 2013.
The latest development in the lawsuit is that Judge Analisa Torres reaffirmed last July's ruling this August, stating that Ripple's sale of XRP to retail investors through exchanges did not violate securities laws. However, after determining that Ripple's sale of XRP to institutions violated securities laws, the judge decided to impose a fine of $125 million on Ripple, which is far less than the $2 billion sought by the SEC.
At that time, the judge also issued an injunction against Ripple, requiring Ripple to refrain from any further violations of securities laws.
Recently, it has been reported that the SEC is seeking to appeal Judge Analisa Torres' latest ruling regarding XRP. However, with Gary Gensler about to step down, the next SEC chair is expected to be more friendly towards cryptocurrencies, which could influence the direction of the Ripple case.
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Which crypto companies targeted by the SEC are likely to benefit?
Currently, Trump has not officially announced his preferred candidate for the new SEC chair, but The Washington Post recently cited five informed sources indicating that Trump's advisers are considering current regulatory officials, former federal officials, and financial industry executives for key leadership positions, many of whom have publicly expressed support for cryptocurrencies.
The market is expected to welcome a more friendly SEC towards cryptocurrencies, meaning that companies in the crypto space like Ripple, which have previously faced pressure and lawsuits from the SEC, may see their lawsuits soften, settle, or even be withdrawn. Here are several major crypto companies that are likely to benefit.
Binance: The SEC sued Binance and its founder Zhao Changpeng (CZ) last year for operating an unregistered securities exchange and submitted a revised complaint in September this year, reaffirming the allegations against Binance for violating federal securities laws.
Coinbase: The SEC sued Coinbase last year for providing trading, brokerage, and clearing services for unregistered securities, handling billions of dollars in illegal cryptocurrency 'securities' since 2019, and allowing customers to earn rewards on securities products.
Kraken: The SEC sued Kraken last year, accusing Kraken of not being registered as a broker, exchange, or clearinghouse, and alleging that some cryptocurrency transactions on its platform constituted investment contracts, falling under the category of securities.
Additionally, Gary Gensler insists that, apart from Bitcoin and Ethereum, most digital assets like SOL, ADA, and MATIC are considered securities. This position has been criticized by the crypto community as overly arbitrary, forcing cryptocurrency companies to operate in a regulatory vacuum, and this situation may also change in the future.
