In a shock move that has forced the cryptocurrency markets lower, the United States Securities and Exchange Commission (SEC) on June 5 sued Binance, the world’s largest cryptocurrency exchange, accusing them of 13 charges, one of which is allegedly enabling the trading of unregistered securities.
Top of the list, the regulator said, was that Binance allegedly allowed the trading of several crypto assets, including BNB, the platform’s native currency; Cardano’s ADA; and MATIC, the token priming the Polygon ecosystem.
XRP Not A Security?
The SEC didn’t mention payment company Ripple, the native currency of the XRP Ledger, a platform through which the company bases its flagship products. The two entities have been entangled in a legal fight since late 2020, when the regulator accused the payment company of allegedly selling an unregistered security, XRP.
It should be noted that despite the regulator mentioning XRP, the coin’s price is lower and weighed by the market-wide collapse that has so far wiped billions in value from the total crypto market capitalization, according to CoinMarketCap (CMC), a coin tracker.
When writing on June 5, the total cryptocurrency market cap had contracted by over 5% to $1.09 trillion. During this time, the XRP price has been down 7% in the past 24 hours.
However, comparing the current performance to how XRP faired last week, the coin is the only one in the green territory, adding 3%. This means XRP has outperformed all the top-10 cryptocurrencies, including Ethereum and Bitcoin.
The failure of the SEC to mention XRP in their lawsuit could be a huge boost for the token and its ecosystem in the days and weeks ahead. This is especially considering the ongoing case.
Ripple Supporters Remain Bullish Despite SEC’s Accusations
The case is ongoing, but there have been rulings in recent weeks that make XRP supporters optimistic. The presiding judge has denied SEC’s motion to seal the Hinman documents.
Although the SEC vehemently campaigned for these documents to remain private, claiming they were deliberative and privileged, the judge said the public had the right to know since they are relevant to the case.
These documents are critical in the case as they detail internal communication by the SEC on how they classified XRP as a security.
Still, the judge is yet to make a ruling though the SEC, in March 2023, filed an amended complaint against Ripple, claiming they were engaged in market manipulation. Ripple has since filed a motion to dismiss the regulator’s amended complaint saying they are “baseless.”