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The fate of cryptocurrency XRP (XRP-USD) is being heavily influenced by the U.S. Securities and Exchange Commission (SEC) lawsuit against its parent company Ripple. This week, the focus has shifted to the potential success of Ripple’s “fair notice” defense. The crypto has seen a 3% rise over the past 24 hours, indicating some bullish near-term momentum.
In a Supreme Court ruling, Romanian immigrant Alexandru Bittner was charged with failing to file reports for his 272 bank accounts. Despite facing a $2.72 million fine, he was only hit with a $10,000 penalty. The conclusion was that the SEC did not provide adequate clarity regarding the reporting requirements, which in turn led to the reduced penalty.
This case could be relevant to Ripple’s success against the SEC, as it may be argued that the authority failed to give Ripple proper notification that its coin offering was required to be registered as a securities offering. If this can be established, then Ripple could be successful in having the case dismissed or at least have the penalties reduced.
The news has caused renewed interest in XRP. It is one of the oldest crypto projects and its value as a low-cost cross-border payment option has attracted attention. Yet the SEC lawsuit has weighed on XRP, causing it to significantly underperform most of its major peers over the past year.
If the case is resolved favorably for XRP holders, then the coin could experience significant gains. On the other hand, if it goes against them, the losses could be severe. As such, investors must weigh the potential gains and losses and decide whether or not to make a bet on XRP.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The views expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
