Why Ripple’s XRP Surged Almost 80% Over The Past Week

9th February 2022
Why Ripple’s XRP Surged Almost 80% Over The Past Week
Marco Verch

The price of XRP – the cryptocurrency used by Ripple – has surged more than 50% over the past week.

On 3 February 2022, XRP fell to a low of US$0.509302. Just five days later, on 8 February, the altcoin reached US$0.907584 – an increase of 78%.

Over the past 24 hours, XRP fell to US$0.809655 before bouncing back to S$0.88307 – still 73% higher than 3 February and reaching levels not seen since December 2021.

Across the board, cryptocurrencies have generally enjoyed a positive week in the markets so far. Bitcoin has posted its longest rally since September, whilst Shiba Inu popped over 50%. However, there’s more to XRP’s price rally than warm market sentiment.

1 Week Chart XRP/USD (CoinDesk)

Much of XRP’s price surge is accredited to a flaw in the U.S. Securities and Exchange Commission’s case against Ripple.

SEC Lawsuit

In 2020, the SEC sued Ripple, alleging that XRP a security rather a currency and thus should be subject to strict security laws.

The SEC accused Ripple and two top executives of raising more than US$1.3 billion in an unregistered digital-asset securities offering using XRP between 2013 and 2020.

Ripple had indeed sought advice from an unidentified global law firm in 2012 whilst contemplating the launch of a new digital token. The law firm submitted two memos analysing the legal issues surrounding the launch, which have since been docketed under seal.

The SEC believes the documents show that Ripple and its then CEO Christian Larsen knew that XRP would be considered as a security under federal law.

Ripple and Larsen – now chairman of the company – say the documents show that the lawyers concluded the tokens were not securities.

In the latest development, U.S. District Judge Analisa Torres of Manhattan last week said the two memos must be unsealed and released publicly by 17 February.

However, Ripple insisted the memos remain under seal as they “reflect the proprietary internal business strategies, analyses, impressions and concerns of a private company and its founder”.

Nonetheless Torres highlighted that Ripple’s defence against the SEC’s allegations relied heavily on its lawyers “concluding that XRP were not a security.”

Ripple has since accepted that the memos will be made public. In an email statement, Ripple general counsel Stuart Alderoty said that when the documents are released, they “will show that in 2012 Ripple received a legal analysis that XRP was not an investment contract”.

Alderoty added that it was “baffling” that the SEC took eight years to criticise Ripple whilst XRP had been trading globally.

“We look forward to the public having access to these documents as we continue to vigorously defend this case”, Alderoty said.

Written by Bread News Team
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