XRP soared above $1 and hit a 3-year high on Tuesday amid a boom in cryptocurrencies. Last December, the SEC filed a lawsuit against Ripple, alleging that its sale of XRP was an unregistered securities offering worth over US$1.38 billion. In its affirmative defenses, Ripple stated that XRP is not a security or investment contract, and the firm’s sales or distributions of XRP are likewise not investment contracts. Unlike Bitcoin or Ethereum, where new coins are created through the mining process as a reward, the XRP amount is limited to 100 billion coins. The U.S. Securities and Exchange Commission (SEC) is ignoring that the XRP cryptocurrency has utility, fintech startup Ripple alleged in its response to a securities complaint filed by the regulatory agency. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a, filed a Freedom of Information Act request. The multi-billion-dollar lawsuit targeted Ripple’s activity from 2013 onwards. The answer to the aforementioned question could have a significant impact on how XRP, the cryptocurrency at the center of the lawsuit, does on the price charts too. How do the SEC's announcements shift prices? This article is for information purposes only and should not be considered trading or investment advice. At the time of writing, XRP has a market cap of over $20 billion and a single unit price of $0.44, less than 5% down from the previous week. Egypt is in the top five nations globally in terms of remittance flows from ex-pat communities. Although XRP suffered a loss of nearly 60% in price after the lawsuit began, it has recovered despite being subject to scrutiny in the US market and exchanges becoming wary of accepting XRP trades. After rising over 5% in the last day, the price of an XRP token is now $0.60, and the market cap is $27.9 billion, according to data from Nomics. 2020 was a striking year for cryptocurrencies as it ended with the most prominent bull run since late 2017. In a Friday filing, Ripple Labs pushed back against the SEC’s allegations. You can always unsubscribe with just 1 click. Last year, Federal Reserve Governor Lael Brainard announced the Boston branch of the U.S. central bank was exploring a digital dollar. Ripple CEO Brad Garlinghouse speaking at the DC Blockchain Summit 2019. Although XRP suffered a loss of nearly 60% in price after the lawsuit began, it has recovered despite being subject to scrutiny in the US market and exchanges becoming wary of accepting XRP trades. Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox. A lawyer says Ripple would be "feeling pretty good" with comments from a judge in the SEC's case against the firm and its executives. As we have said for many years, we’re simply asking for the rules to be clearly stated and applied consistently,” a spokesperson said in an emailed statement. In a 93-page filing, Ripple responded to each of the SEC’s paragraphs. XRP, the native token of Ripple, did not mimic its early 2018 rally when it surpassed $3. She’ll be speaking next week at Consensus. XRP is up nearly 10% over the past 24 hours, joining a broader spike across the crypto market that saw dogecoin jump over 700% on Thursday. The price of bitcoin is now down more than 30% so far in May, on track for its worst month since November 2018. Most recently, MoneyGram has announced it will halt its partnership with Ripple, and the use of its XRP token, after the SEC launched its lawsuit. Back in December, the crypto fell by over 50% after the SEC first filed charges. Armstrong said he visited Capitol Hill to network and help answer questions about crypto. In addition to filing its response, Ripple filed a Freedom of Information Act request for documents from the SEC on how it determined that bitcoin and ether, the top two cryptocurrencies by market capitalization, are not securities. “The Complaint mischaracterizes advice that Ripple received in 2012, from which a reasonable reader actually would have concluded that Ripple Credits (a past name for XRP) were not a security,” the filing adds a few paragraphs down. Most recently, MoneyGram has announced it will halt its partnership with Ripple, and the use of its XRP token, after the SEC launched its lawsuit. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. However, the financial-oriented payment network increased its market cap during the emerging bull run. Its value resides in its fast processing speed. XRP is still in high demand as exchanges outside of the US aim to list the token, although there is skepticism about where XRP will end up. Get the latest crypto news delivered to your inbox daily. XRP tokens are distributed to companies and financial institutions such as Santander, the Commonwealth Bank of Australia, or MoneyGram to create fast transactions through the Ripple network and avoid high conversion fees. The SEC filed a lawsuit against Ripple in December, alleging that its sale of XRP was an unregistered securities offering worth over US$1.38 billion. XRP, at the time of writing, was trading at a healthy $1.39, with the altcoin having surged to a 3-year high only recently. Unlike Bitcoin, which holds an intrinsic value and is not a security according to the SEC, XRP facilitates money transfers between different countries and financial institutions. That is why their MoneyGram partnership saw Ripple put its XRP token to good use as it faced a backlash from the crypto community for being a financial token. To require XRP’s registration as a security is to impair its main utility,” the response said. “To date, they have offered no guidance for that determination, hindering responsible players like Ripple from being able to innovate in the U.S. to bring faster, cheaper and more transparent global payments to consumers who need them the most. “The functionality and liquidity of XRP are wholly incompatible with securities regulation. Ripple Responds to SEC Lawsuit Over XRP Sales In a Friday filing, Ripple Labs pushed back against the SEC’s allegations. Ripple has reframed how the XRP token required to conduct cross-border financial transactions fits within the blockchain ecosystem. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy. It pointed to its settlement with the U.S. Department of Justice and the Financial Crimes Enforcement Network in 2015, which registered XRP as a convertible virtual currency and allowed for sales and secondary market transactions. In December 2020, Ripple’s potential market growth was put to a halt after the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and its executives Bradley Garlinghouse and Christian A. Larsen for failing to register the network’s native token as a security. In a Friday filing, Ripple Labs pushed back against the SEC’s allegations, which claim the San Francisco-based firm violated U.S. securities laws for over seven years by selling $1.3 billion worth of XRP tokens. Although the market has turned south on the XRP token, analysis indicates the price is becoming stable, with an upward trend and a signal for a potential breakout for the token. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss. However, the filing at the Southern District Court in New York is viewed with skepticism in the crypto space.