Ripple is one of the major large coins with huge trading volumes and a large community. There is a lot of investment bankers’ capital invested in the coin. It’s not for nothing that they say Ripple is a bankable coin. If sanctions are imposed, the bankers will successfully break them. They have a lot of money and will pay fines if they have to. Yes, the coin is going down now due to negative news. But don’t forget the main rule of trading: buy when the value goes down. Let’s talk about XRP supply and tokenomics.
Ripple and the SEC
The decision on the further fate of the company will depend on the decision of the question, is the cryptocurrency Ripple a means of payment or is it an investment instrument purchased by investors for the purpose of speculation and profit from the growth in value? Back in 2015, Ripple reached an agreement with another U.S. government agency, FinCEN, the XRP token was recognized as a convertible virtual currency rather than a security.
The SEC has a history of making companies rethink their business model because of its complaints, but it did not shut them down. Such was the case with Telegram, when the company wanted to issue a Gram token asset and tried to fall under the securities law exception to do so. But although it was asked to pay back the money it had taken from investors, this did not lead to its closure or serious criminal liability. But there are cases where companies and individuals have been criminally liable, leading to the closure of the company, as was the case, for example, with AriseBank, a crypto-bank.
This is not the first incident involving the sale of digital assets to which the U.S. regulator is paying attention. The Ripple team should pay attention to the EOS case. The project promptly settled such a claim in pre-trial order. It is possible to take a risk and speculate on the movements of quotations, expecting positive news from the Ripple team or, on the contrary, a fine. But in the long run, there is no reason to hold the asset – there is no “tokenomics” in it. Nevertheless, it could be a good investment if the project continues to grow. After all, in the medium term, the growth of this asset can be a logical continuation.
Ripple won its case against the R3 blockchain consortium (which includes more than 70 retail and investment banks, including Barclays, HSBC, and UBS). This shows that the company has serious legal backing. However, in the SEC’s case, as the example of both Facebook and Telegram shows, “political will is more important.”
The SEC continues to pursue a hard line of “a token is a security” and compliance with the laws on public offerings of financial instruments and securities must be conducted in strict compliance with U.S. law.