- The SEC vs Ripple case has already had a big impact on the price of the XRP token
- There are three likely outcomes in the case, all of which will probably result in the XRP token booming
- Only closure of the company will have a negative impact on the price
The Securities and Exchange Commission (SEC) vs Ripple case is one of the biggest cryptocurrency stories in recent years, with the entire community waiting and wondering which way the court will side. However, while the XRP token took a hit the day the news was announced, its recovery has been unsurprising and, in fact, there is every likelihood that any of the three most likely outcomes will end up with XRP taking a brief trip to the moon – including if Ripple loses.
History is on Ripple’s Side
The reason we can be confident that the XRP token will jump whatever the outcome of the SEC case is down to historical precedent and what the SEC wants out of it. The SEC isn’t interested in pursuing criminal charges against Ripple’s founders, meaning that any punitive action is going to be financial in nature. We saw the same in 2019 when EOS creator Block.One was charged with selling unregistered securities through its year-long ICO, which resulted in a $24 million fine…and an 11% rise in the EOS token price.
History suggests that if the SEC wins, Ripple will be forced to pay a fine, which it will do probably by selling a bunch of XRP tokens. The SEC can then make its statement about bringing cryptocurrencies into line, Ripple can say that it doesn’t agree but it has no choice but to pay up, and the entire saga will be put to bed.
As we saw with the Tether lawsuit, anything better than a prison sentence will be taken as a victory, the case will be officially put to bed, and the XRP token will pump as a result. There will then be a rush from the exchanges that dumped XRP five months ago to take it back, and the whole thing will be forgotten.
XRP Will Go Stratospheric if Ripple Wins
On the flip side, if Ripple wins its case against the SEC then we can expect XRP to go not just to the moon but three times round it and then onto Mars, with exchanges relisting it quicker than you can say ‘the standard’. The momentum created by such an event would be unlike anything we have yet seen in the crypto space, with potentially huge ramifications for the entire industry on a fundamental level.
The most likely outcome however, as we saw with Block.One, is that the SEC and Ripple will agree a settlement figure which Ripple will have to pay to close the case with no admission of guilt. In fact it is very likely that these discussions are going on right now. Again, as we saw with the Tether case, this outcome suits everyone – the SEC gets its money and claims victory, Ripple walks away proclaiming its innocence, and the taxpayer avoids a costly court case. XRP is relisted and…you know the rest.
Closure is Only Route to Zero
The only way XRP won’t enjoy a huge positive move when the case is over is if the SEC is able to shut the entire project down as a result of the charges. However, because the SEC is not seeking such an outcome can be all but discounted, and the fine is not going to be so large that Ripple folds. It is for this reason that we can be very confident that when the case is finally settled, Ripple, and XRP holder, will win whatever happens.