The price of Ripple (XRP) has dropped by 9%, reaching a low of $0.55 at the end of the week, according to CoinGecko’s data. The decline follows the U.S. Securities and Exchange Commission’s (SEC) recent decision to cancel a key meeting.
The SEC’s recent meeting cancellation has erased all Wednesday’s gains.
The SEC had planned a closed-door meeting, which was scheduled for July 18, according to the SEC’s recent notice. The meeting was expected to discuss several topics, including initiation and settlement of legal and administrative actions, and resolution of ongoing litigation claims.
The noted subjects stirred speculation that the meeting would involve settlement talks regarding the ongoing lawsuit between the SEC and Ripple, which has been ongoing for 3 years.
Hall Of Mirrors
Speculation intensified after Ripple CEO Brad Garlinghouse suggested the imminent resolution with the SEC.
“Suffice to say, that the ruling has been clear from the judge,” Garlinghouse said in a recent interview with Bloomberg. “We expect resolution very soon, but can’t predict when the judge will rule there.”
Despite no further comments from the SEC and Ripple CEO, news of a potential settlement was a positive catalyst for Ripple’s price actions. Following the news, XRP surged by 13% to cross the key $0.6 level on Wednesday. Previously, XRP was stuck between the $0.4 – $0.5 range.
However, the rally was short-lived. After an increase on Wednesday, the XRP price plummeted following the SEC’s abrupt cancellation of the scheduled meeting. The unexpected cancellation also led to disappointment among the XRP community, who had hoped it might lead to a resolution of the multi-year legal battle.
Despite the cancellation, it’s worth noting that the SEC has conducted approximately 150 similar closed-door meetings since the lawsuit began, with no settlements resulting from those discussions so far.
The price drop, however, appears not to deter the XRP community’s confidence in Ripple’s long-term prospects. Some experts, like attorney Fred Rispoli, predicted a possible case resolution by the end of July.
The legal battle between the SEC and Ripple has been ongoing since late December, when the securities watchdog filed a lawsuit against Ripple Labs, its CEO Brad Garlinghouse, and co-founder Chris Larsen.
SEC Drags It Out
The SEC claimed XRP was a security that should have been registered, and that Ripple conducted a sale of unregistered securities. Ripple defended that XRP is not a security, and that the SEC failed to provide fair notice that XRP would be considered a security.
In July 2023, the court handed down a summary judgment ruling that Ripple’s programmatic sales of XRP were not securities, but its institutional sales were unregistered securities offerings. This led to a trial on the remaining charges.
The case is still ongoing as the parties continue to argue over the remedies and penalties that may be imposed on Ripple. The final resolution of the lawsuit remains uncertain. Ripple and the SEC continue to disagree on the appropriate penalty for the alleged securities law violations, with the SEC seeking a $2 billion fine and Ripple proposing $10 million.
Speculations regarding the reason for the SEC’s cancellation have started circulating within the crypto community. Some suggest that the SEC’s focus might have shifted towards expediting the approval of spot Ethereum ETFs, several of which have already received initial approvals.
After weeks of review, several spot Ethereum ETFs are expected to debut trading next week, Bloomberg ETF analyst Eric Balchunas estimated. All ETF issuers already submitted their updated S-1 forms to the SEC earlier this week in preparation for the final approval.
XRP was not the only cryptocurrency to surfer a major decline today. Shiba Inu (SHIB) also experienced a major dip following a recent cyberattack that targeted WazirX, the leading cryptocurrency exchange in India. The attacker reportedly sold all of the stolen SHIB.
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