The past weeks are arguably one of the worst moments in the history of the XRP cryptocurrency as it has recorded massive dumps from investors in the wake of the lawsuit filed against Ripple by the United States Securities and Exchange Commission (SEC).
While many people may not understand the correlation between Ripple and XRP, it is pertinent to understand that the lawsuit was filed against Ripple, a payment processing company, and its executives based on allegations that they are aware that XRP, an independent cryptocurrency is an unregistered security and that the former firm has sold and distributed as much as $1.38 billion worth of the coin.
The Ripple company has always distanced itself from XRP saying that they work independently but the SEC allegations take deep roots in the fact that the payment services of Ripple are facilitated by the XRP cryptocurrency which makes any claims of no ties of no effect.
The SEC is now seeking as much as $1.2 billion in fines amongst other legal demands. This allegation has been denied by Ripple and the named defendants, Brad Garlinghouse, Ripple’s chief executive officer, and Chris Larsen, Ripple’s co-founder, are determined to fight out this legal battle with the SEC, a position that XRP holders do not want to get caught up with, hence, the spate of sell-offs of the coin as seen in the past days.
Following the legal actions initiated by the SEC, the price of XRP coin has been on a downward spiral ever since. According to crypto market data aggregator, Coingecko, XRP has dropped 61.5% in the past week since the lawsuit was filed.
The value of XRP dropped much harder as reports of cryptocurrency exchanges delisting the coin made the rounds in the week and that of Coinbase which is billed to happen sometime in the New Year has sent XRP down an extra 33.4% in the past 24 hours at the time of writing (02:12 PM UTC -1).
Nonetheless, the position of XRP as the fourth-largest cryptocurrency by market capitalization is not threatened yet as it still retains its position in the face of the troubling sell-offs from the coin holders. With the losses, XRP’s market cap of $9.147 billion is still a sizable amount ahead of Litecoin (LTC), the next ranked cryptocurrency which has a market cap of $8.539 billion.
One would expect XRP to lose its place among the top ten cryptocurrencies, but unless a more dramatic sell-off is pulled off by a sizable number of whales, XRP’s market capitalization may remain unbeaten by even the other popular coins seeing the best of days.