XRP, or Ripple, is a very popular name in the crypto world. However, since its launch in 2012, it has revolved around many controversies, and that’s the main reason why it got stuck into a specific price range even though it has potential.
So, what are the reasons why Ripple (XRP) is not going up? So, are there some legal issues with the Ripple, or is it dead? If you also have these questions on your mind, then you are in the right place.
Here, we will explain some facts regarding the XRP so that you can better understand of whether it is growing in the future or not. So, let’s get started with the article.
History of Ripple
Founded with ambitious goals of disrupting the traditional banking system, Ripple burst onto the cryptocurrency scene. With Ripple, you can bridge the decentralized world of blockchain technology with the traditional financial world, unlike with Bitcoin or other cryptocurrencies.
By utilizing the Ripple Protocol Consensus Algorithm (RPCA), its consensus ledger made transactions faster and more scalable than Bitcoin’s proof-of-work scheme.
Its partnerships with major financial institutions and banks, such as Santander and American Express, were one of Ripple’s greatest selling points.
By partnering with these companies, Ripple (XRP) was able to validate its vision and increase its value. According to market capitalization, XRP reached its highest point of $3.84 in early 2018, making it the third-largest cryptocurrency.
What Are The Regulatory Challenges?
Although Ripple has enjoyed early success, it has faced a series of legal challenges and regulatory challenges that have hindered its growth.
XRP is classified by the Securities and Exchange Commission (SEC) as a security, which presents many challenges.
By selling XRP, Ripple Labs allegedly engaged in an unregistered securities offering, according to the SEC’s lawsuit filed in December 2020.
This legal action caused XRP’s price to plummet as a result of the shockwaves it sent through the cryptocurrency community. It has been difficult for Ripple to expand its ecosystem and secure new partnerships because of the uncertainty surrounding the lawsuit.
How Does Ripple’s Legal Battle with the SEC?
Both sides have presented compelling arguments to support their positions in the legal battle between Ripple and the SEC.
The SEC has vigorously denied the allegations made by Ripple, claiming XRP does not constitute a security or financial product, but rather a digital asset, similar to Bitcoins and Ethereums.
Within Ripple’s ecosystem, XRP facilitates cross-border payments and liquidity provision. This is the basis for Ripple’s defense. It contends that XRP is a currency or commodity, not an investment contract.
XRP, however, is considered a security by the SEC as investors buy it expecting to profit from Ripple’s work. Ripple and the broader cryptocurrency industry are eagerly awaiting the outcome of this legal battle. It will set a precedent for how other digital assets will be regulated.
How Market manipulation Allegations Imposed to XRP
Furthermore, Ripple has been accused of market manipulation and unfair practices as well as regulatory challenges. XRP has been accused by critics of using tactics to artificially inflate its price, such as selling large amounts of the digital currency to fund operations.
Some critics claim that Ripple has a significant influence over the cryptocurrency supply and price due to its large holdings of XRP.
With this concentrated supply, Ripple executives and its executives have been criticized for the potential for market manipulation.
What is The Future of Ripple?
It remains optimistic that Ripple’s future and its XRP price will improve despite the myriad challenges it faces. Forging new partnerships with banks and financial institutions around the globe is another way Ripple continues to invest in expanding its ecosystem.
Additionally, Ripple has explored applications in decentralized finance (DeFi), non-fungible tokens (NFT), and central bank digital currencies (CBDCs), in addition to cross-border payments. In the long run, these initiatives may help widen the utility of XRP and increase its demand.
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