Cryptocurrency at Center of SEC Dispute Tumbles as Agency Appeals Judgment
10/03/2024 21:34
(Bloomberg) -- XRP, the cryptocurrency that has been the focal-point of a long running legal battle between its issuer and the SEC, slumped as much as 11% after the agency appealed an earlier court ruling that was viewed as favorable for the company. Most Read from BloombergThe Corner Store ComebackA Housing Crisis Brews in Rwanda’s Capital CityGang Violence Is Moving to the Amazon’s Fast-Growing CitiesA 7,000-Year-Old City Emerges as a Haven from Dubai’s Sky-High RentsRoofs of Mexico City’s Mas
(Bloomberg) -- XRP, the cryptocurrency that has been the focal-point of a long running legal battle between its issuer and the SEC, slumped as much as 11% after the agency appealed an earlier court ruling that was viewed as favorable for the company.
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Ripple Labs Inc. was sued in 2020 by the US Securities and Exchange Commission, which claimed the San Francisco-based company broke the law when it raised money by selling the digital token without registering it as a security. Last year, US District Judge Analisa Torres found XRP was covered by securities law only when sold to institutional investors, a ruling hailed as a major victory for the industry.
On Wednesday, the SEC appealed the decision that ordered Ripple to pay a $125 million civil penalty for improperly selling XRP, a fraction of the $2 billion the regulator sought.
The appeal came a day after Bitwise Asset Management Inc. became the first to file with the SEC for an exchange traded fund that invests directly in XRP, the world’s seventh-largest digital token.
There was “anticipation that the XRP ETFs were gonna happen and a lot of traders were positioning ahead of the event,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “A lot of long positions on XRP in the futures market got wiped out in the past 24 hours. People are kind of unwinding their positions now.”
XRP fell as much as 11% to around 51 cents on Thursday, before recently trading at about 52 cents. It has slumped almost 20% over the past four trading sessions. The token has a market value of roughly $29 billion, according to data compiled by CoinMarketCap.
--With assistance from Isabelle Lee and Chris Dolmetsch.
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