XRP surged by almost 40% to $0.64 earlier this week amid widespread speculation that Ripple Labs was nearing a settlement agreement with the U.S. Securities and Exchange Commission—though it has since fallen back to $0.56 after regulators gave notice that a closed-door meeting was canceled.
The rally early in the week, which briefly made XRP the sixth-largest cryptocurrency globally by market capitalization, appears to have been driven by investor speculation that a non-public SEC meeting was related to Ripple, the crypto payments firm associated with XRP.
The meeting notice included agenda items such as “institution and settlement of injunctive actions” and “resolution of litigation claims,” but did not mention XRP or Ripple Labs by name.
XRP climbed throughout the day on Wednesday, July 17 in anticipation of the meeting scheduled for the following day. The price then reversed course and began to fall overnight after another SEC notice announced that the meeting had been canceled.
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The price XRP gradually fell further throughout Thursday and into early Friday, though has started to tick back up. As of this writing, XRP remains up 24% on the week at a current price of $0.58.
A Ripple Labs spokesperson confirmed to Decrypt on Friday that the firm “did not meet with the SEC this week.”
The SEC posted yet another notice announcing a new closed-door meeting to be held on July 25. Notably, the agenda for this meeting contains several of the same items as the previous agenda for the canceled July 18 meeting, although “institution and settlement of injunctive actions” is not present.
Although none of the SEC notices have specified Ripple Labs’ involvement, many crypto investors have interpreted them as a signal that a long-awaited resolution may be nearing following several years of legal turmoil. Social media influencers have been sharing speculative tweets about the meetings, in some cases connecting them to the Ripple case without proof.
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The SEC sued Ripple Labs in 2020 for $1.3 billion, alleging that the fintech firm tied to XRP violated its rules when it sold the token without registering it as a security. Following years of protracted legal battles, including a partial win for Ripple last fall, Ripple proposed a fine of $10 million in April; the SEC countered that it sought a penalty of $2 billion.
Some reflections as we approach the one year anniversary of Judge Torres’ Summary Judgment decision in the SEC v Ripple lawsuit.
First and foremost – it was a watershed moment to find as a matter of law, a token – in this case, XRP – in and of itself, is not a security.
In a recent tweet, Ripple Chief Legal Officer Stuart Alderoty wrote that the firm is awaiting remedies from the judge in the matter, but that the “court’s ruling that XRP is not a security will not change,” adding that “even the SEC told the court it will not challenge that conclusion.”
The outcome of the SEC’s lawsuit could have far-reaching implications for the broader cryptocurrency space, as it may help to define more clearly the regulator’s jurisdiction over digital tokens.
