The lawsuit between Ripple and the US Securities and Exchange Commission (SEC) has been entering critical stages since April 2023.
Although Ripple has achieved several partial victories in court over the past year, the regulatory body still has chances to emerge victorious.
In this post, we will review the potential effects on the price of XRP if Ripple loses the case.
If Ripple loses the case, what impact will this have on the price of XRP?
What is almost certain is that Ripple's loss to the SEC could lead to a significant drop in the value of XRP.
The main reason is the possibility of investors' confidence in the currency being shaken, which could lead to a mass exit from the currency.
Ripple may also face huge fines and new operational restrictions, which could damage its reputation and reduce the adoption and use of XRP.
A win by the SEC in the case could result in XRP being classified as a security, which would entail stricter regulatory oversight.
This may significantly impact the use of XRP in global and cross-border financial transactions, posing an impediment to the growth of the currency.
Finally, this negative outcome will not only affect XRP, but may shake the entire cryptocurrency market, leading to significant price fluctuations and increased uncertainty among investors due to fears of additional regulatory actions towards other cryptocurrencies.
Possible penalties:
The size of the expected penalties for Ripple is a major topic in the legal dispute.
Initially, the SEC sought a massive $2 billion fine, accusing the company of conducting an unregistered securities offering through the sale of XRP coins.
Ripple responded to this claim by saying that the fine should not exceed $10 million, noting the absence of direct allegations of fraud in the case, unlike the Terraform Labs case, which ended with a civil fine of $420 million.
In a later development, the SEC softened its demands, proposing a smaller fine of $102.6 million.
