Not so long ago, specifically sometime in November 2020, a substantial part of my crypto portfolio was XRP popularly called Ripple which owns a majority stake in the token. At that time its value was appreciating at a good rate as its price rose steadily. Unfortunately I had to liquidate my XRP holdings to take care of some urgent expenses just before its value doubled the price at which I had bought the token. At that time I was pained at having to liquidate my XRP holdings as I also missed out on the snapshot for the Spark airdrop.
However in hindsight with the current state of affairs of XRP, it was probably a stroke of luck that I liquidated my XRP back then as hodling it till now would have meant me earning no profit or worse still accumulating losses due to the rapid nose dive of the price of XRP. It was indeed a case of an unfortunate or undesired choice turning out in my favour.
The travails of XRP began towards late December,2020. Its value is reported to have dropped by more than 42% within a 24 hour period in December after the United States Securities and Exchange Commission (SEC) announced that it had filed a complaint against Ripple, its parent company.
The SEC argues the XRP is a security which is a tradable asset and consequently should have been subject to its regulations for securities. The implication of this is that XRP should have been registered with the SEC since 2013. The SEC further claims that Ripple, its CEO and Executive Chairman generated more than $ 1.3 billion in revenue from the sale of XRP tokens.
Ripple's CEO however maintains that the claims being made by the SEC are completely out of place and wrong. His defense has however not been sufficient to calm down the hysteria that followed the announcement of the filing of the SEC suit. Notable analysts in the crypto space opine that XRP may not be able to recover from the fall out of the suit as it is likely that the SEC would have built a solid case before proceeding to file the suit. As part of the ripple effect some prominent exchanges have either suspended XRP trading or delisted it altogether. They include;
Binance US is due to delist XRP on January 13, 2021. The reason these exchanges (particularly those having dealings with customers in the United States) are taking this step is to avoid potential legal issues as continued trading of XRP tokens would amount to breaking the laws of the United States.
Ironically some players in the crypto world are pleased with the current travails of XRP. They argue that the fact that Ripple had a significant grip on the XRP token renders the token's claim to sufficient decentralization invalid unlike Bitcoin and other major tokens.
In a related development Coinbase exchange has been sued by a customer who argues that the exchange was aware of the securities status of XRP but still went ahead to sell the token to unsuspecting buyers on its platform. The complainant is seeking damages for commissions paid by himself and other customers to Coinbase exchange for XRP tokens.
One thing is clear, the XRP token is likely not going to emerge from the ripple effect of the SEC suit unscathed. This could eventually signal the beginning of the end of the eight year race of the token which has been characterised by more lows than highs.