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XRP, a cryptocurrency originally launched by the founders of crypto payments company Ripple, jumped 11% early Friday morning following a strong week of gains—and hope from investors that the SEC’s lawsuit against Ripple may be coming to an end.
Trading today for XRP has since cooled a bit, now up 3% on the day. But that's still enough for a sharp rise of 44% over the past seven days, now back in the top six coins by market cap, despite a general crypto market slump. Bitcoin is back under $19,000, while Ethereum is down another 12.8% amidst its post-merge selloff.
The price pump for XRP follows news earlier this week that both Ripple and the SEC have filed motions for summary judgment in the $1.3 billion lawsuit, each seeking to dismiss the lawsuit before trial and asking the judge to rule in their favor. The SEC filed charges against Ripple in December 2020 for allegedly conducting an unregistered securities sale when it sold XRP.
In a memorandum accompanying its filing, Ripple argued that it conferred no rights to XRP holders during its token sale, and that the company had no obligation to act in their interests.
“Filings show that the SEC is acting outside their legal limits,” Ripple General Counsel Stu Alderoty said in a statement. “The SEC is not looking to apply the law—they are looking to remake the law in the hopes that it can impermissibly expand their jurisdiction.”
By contrast, the SEC alleges that XRP meets the criteria of a security under the Howey Test—a benchmark used since the 1930’s for determining whether an asset qualifies as an investment contract under U.S. federal law. The regulator claims that XRP buyers expected to earn a profit after buying the coin, and that purchases were tantamount to investing in a common enterprise.
Ripple CEO Brad Garlinghouse appeared on Fox Business this week discussing XRP’s price, and its relationship with the RIpple lawsuit.
“Before the SEC got involved with us and ETH, XRP was the second-most valuable digital asset ahead of ETH,” he pointed out.
Garlinghouse said that Ripple expects there not to be a trial, since the facts of the case “aren’t really in dispute,” he said.
“We think [the judge] has the information she needs to make a ruling, and we think it’s very clear the SEC is grossly overreaching their authority,” he said.