Attorney John E. Deaton scored a massively significant victory for the entire crypto industry, the XRP community as well as Ripple yesterday. As Bitcoinist reported, Deaton appeared as an amicus in the remedies hearing in the litigation between LBRY and the U.S. Securities and Exchange Commission (SEC).
The attorney managed to elicit from the SEC, “live and on tape,” that it does not consider secondary sales of the LBC token as securities. In addition, the New Hampshire District Court judge confirmed that he would clarify in the final remedy that he does not rule on the secondary market.
For the LBC token, this meant massively good news, as the previous ruling would have jeopardized the token’s existence, independent of the LBRY company. Accordingly, the price of LBC responded extremely bullish yesterday. After the news became public, the price rose by up to 155%. At press time, the LBC price stood $0.024913, still recording a whopping spike of 120%.LBC price rises parabolic | Source: LBCUSDT on TradingView.com
The rise in the LBC token price following yesterday’s partial victory by LBRY against the SEC may be a foreshadowing of what will happen to the XRP price in the event of a Ripple win and regulatory clarity.
When the lawsuit against Ripple was filed by the SEC in late December 2020, the XRP price plummeted a staggering -72% in one week, from $0.60 to $0.17.
Since the lawsuit, XRP has also shown significant relative weakness against other cryptocurrencies, such as BTC and ETH. While Bitcoin is down -66.7% and Ethereum is down -67.7% from its all-time high, XRP is down -88.1%. This suggests that potential XRP investors have been reluctant to invest due to the high risk associated with the SEC case.
A Ripple victory, on the other hand, could trigger a euphoria that will attract new investors and make existing investors increase their XRP holdings. As XRP community lawyer Bill Morgan said, the LBC rally shows what is possible in the event of a Ripple victory.
In addition, it should also be noted that Ripple and LBRY are in completely different positions. The U.S. Securities and Exchange Commission won the lawsuit against LBRY, and the judge ruled that all sales of LBC by LBRY are securities.
This means that LBRY can no longer sell LBC tokens without first obtaining approval from the US Securities and Exchange Commission. Ripple, on the other hand, is fighting to ensure that all XRP sales are not securities as of a certain date, or at least in the future.
Ripple can thus still win outright and has a much higher potential. However, it should also be noted that the XRP market is much more liquid than the LBC token. Nevertheless, a scenario like the one for LBC does not seem unlikely for XRP, considering the historically suppressed price of XRP.
In addition, a relisting of XRP on U.S. cryptocurrency exchanges could add significant buying pressure, as could partnerships with U.S. companies or banks that have been put on hold due to the SEC. Candidates for this could be Bank of America or MoneyGram.
At press time, XPR stood at $0.4030, awaiting today’s Fed interest rate decision and FOMC meeting.XRP price ahead of FOMC meeting, 1-day chart | Source: XRPUSD on TradingView.com
Featured image from iStock, Chart from TradingView.com