XRP coin is the sixth largest cryptocurrency with a market capitalization of $4.4 billion. XRP is considered as one of the original cryptocurrencies that have established themselves. The cryptocurrency usually stayed in the top five cryptocurrencies if not the top three; however, the SEC’s lawsuit and subpar performance of the token had even resulted in XRP falling from the top ten. Currently, XRP coin stands at $0.87. The price has moved upwards by 8% in the daily timeframe while the weekly upside move is at 22%.
What is XRP coin?
Understanding XRP may prove to be a tad bit tricky given the complexities of the network. So, let us break it down for you. The first thing to know is the difference between XRP coin, RippleNet and Ripple – while each is an essential cog of the larger Ripple ecosystem, they all have different roles.
XRP coin is the firm that owns the network, also known as Ripple Labs. RippleNet is a payment platform that employs real-time gross settlement (RTGS) which is designed to transfer funds instantaneously throughout the world. The network allows the transaction of all sorts of currencies – fiat, crypto and even commodities like gold. Ripple Labs aims to facilitate cross-border payments instantly, securely and cheaply.
Now, XRP coin is the currency that runs on RippleNet. While RippleNet can transact in any currency, the native token used for transaction fees is XRP. XRP crypto is based on the distributed ledger database called XRP Ledger – which is different than a blockchain.
Ripple Labs vs. SEC
The growth of the cryptocurrency has been hit by a controversial lawsuit. Back in December of 2020, the United States’ Securities Exchange Commission announced a lawsuit against Ripple Labs alleging that the firm has been involved in the sale of XRP coin as an unregistered security. Cryptocurrencies are not classified as securities which makes them fall outside the jurisdiction of the SEC. However, with the lawsuit against Ripple, the SEC has launched a broader crackdown on cryptocurrencies. Some have regarded the lawsuit as completely baseless with the SEC only trying to establish its authority in the crypto space.
Ripple Lab’s argument – and any sane person’s argument – is why has the SEC singled out XRP as intrinsically the basic working of the cryptocurrencies is all similar. To this, the SEC believes that XRP coin operates differently than Bitcoin or Ethereum. The lawsuit has been going on for nine months now with no end in the horizon. Both the parties have been delivering blows after blow but no decisive turn has been taken.
The SEC has been granted foreign discovery recently by the ruling judge magistrate Sarah Netburn. SEC has been pursuing foreign crypto exchanges and XRP coin stakeholders but had faced backlash from Ripple Labs on the grounds of intimidation. On the other hand, Ripple Labs has been granted permission to depose an ex-director at the SEC who could potentially reveal SEC’s biases against XRP.
The lawsuit had been a source of bearishness for the cryptocurrency, however, XRP coin has become almost immune to developments of the lawsuit but it can either make or break the cryptocurrency. So, for an investor, right now investment in XRP will be dependent largely on their belief about the ruling of the lawsuit.
