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- The value of XRP, Ripple’s signature product, has decreased significantly over the last year
- The future of Ripple is swiveling on a judge’s ruling on the civil lawsuit filed by the SEC
- Irrespective of the consequences, the case is likely to set a key precedent for U.S. regulators
Ripple, the San Francisco company has requested a special plea for its signature product called XRP. The startup argued that the currency should be free from regulations of the securities laws.
Ripple’s process of Venture Funding
Brad Garlinghouse was examining an early public offering for the respective startup last year. Back then, he was at the World Economic Forum in Switzerland.
The company managed to raise around $200 million in the process of venture funding. Tetragon Financial Group led the venture funding with a valuation of $10 billion.
The value of XRP, Ripple’s signature product, has decreased significantly over the last few weeks.. However, Ripple was determined enough to reconstruct its infrastructure for trades across cross-borders.
Mr. Garlinghouse asserted that Ripple’s XRP have the full potential for a bright future. A year has passed to that respective statement. Today, an IPO is off the table.
The uncertain future of Ripple
Instead, the future of Ripple is swiveling on a judge’s ruling. In December, the Securities and Exchange Commission filed a civil lawsuit against the company. The SEC claimed that the San Francisco company breached some investor-protection laws. Thus, the firm is stuck and the consequences are severely unpredictable.
Irrespective of the consequences, the case is likely to create a key exemplar for U.S. regulators. It will define the way these regulators will craft rules and laws regarding cryptocurrencies.
The case also foregrounds a wider truth about most digital currencies. It is that most of the hundreds of cryptocurrencies struggle to establish a utilitarian worth beyond uncertainties, excluding the two largest: Bitcoin and Ethereum.,
The debate about XRP forms the central point of SEC’s suit. XRP is then a Bitcoin-like digital asset. Established by Ripple’s founders, the asset had advanced to become the world’s third-leading cryptocurrency.
XRP was sketched to be a part of a specific community. This network intends to support banks in cutting their expenditure on cross-border transfers. However, the connected software program has never gained attention, according to the SEC. This has left XRP with an uncertain purpose and it has failed in enabling funnel sales to Ripple.
Thus, it will be interesting to see what will be the results of the respective lawsuit and how will Ripple grapple with those consequences in the coming future.
