The price of one of the world’s most important cryptocurrencies, XRP, is falling and a recently filed SEC complaint is at the root of the free fall. According to CoinMarketCap, the XRP token’s price has dropped more than 42% in the past 24 hours and is down more than 63% from its 30-day high of $0.76. It is now trading at $0.27.
Ripple’s price volatility has rivaled the most capricious of cryptocurrencies. Since reaching an all-time-high (ATH) of $3.84 back in January of 2018, the coin has spent much of the past two years drifting closer and closer to pennies. In the past month, on the back of major rallies from other cryptocurrencies, XRP has faced its biggest rally in years, but those gains were all erased this week by the Ripple CEO Brad Garlinghouse’s admission that the SEC was planning to file a sweeping lawsuit against the platform during the current administration’s final days.
The SEC’s fundamental argument is that XRP has been a security and that it should have been registered with the commission from the beginning more than seven years ago. The SEC says that the defendants in the case — namely the company Ripple, CEO Bran Garlinghouse and executive chairman Chris Larsen — generated more than $1.38 billion from sales of the Ripple token.
Ripple price was recently at $10 billion following a $200 million funding round. Ripple and the XRP token are technically separate, but Ripple maintains a significant total of the currency’s market capitalization and at one point the XRP token itself was referred to as “ripple” and shared a logo with the company.
The company said that that XRP is not a security but is a tool for financial institutions, though the coin’s high volatility has discouraged banks from actually adopting the token. Meanwhile, XRP is present on several crypto exchanges, a fact which could expand the scope of this legal complaint and affect more players in the space.
In a blog post published yesterday that went live shortly after the SEC’s suit was filed, Garlinghouse said that the SEC’s claims were “completely wrong on the facts and law’” and that the company was “confident” they would “ultimately prevail before a neutral fact-finder.”