What is Ripple?Ripple allows for real-time financial transactions with its XRP token. The project is meant to be a faster and cheaper alternative to services offered by financial institutions such as credit card companies, banks etc. This means that you can send and receive funds anywhere and anytime within seconds.
Ripple consists of Ripple Labs and XRP. Ripple Labs is the real-time payment system that allows banks/institutions/individuals to send and receive money. Transactions are performed by the Ripple Transaction Protocol (RTXP). Ripple, on the other hand is the network on which the XRP digital currency runs. XRP and RTXP are two separate entities and can function separately.
The company was founded in 2012 by Chris Larsen and Jed McCaleb. Ripple has a market cap of $77,829,931,144, according to CoinGecko. The company owns 60% of the total supply of tokens (100 billion).
XRP LawsuitIn December 2020, the SEC filed a lawsuit against Ripple and its executives. The SEC accused XRP of being a security and not a currency or medium of exchange. According to the official complaint, the SEC says Ripple allegedly violated multiple sections of the Securities Act of 1933 by not filing a securities registration statement or seeking special exemption.
The SEC wrote that Ripple allegedly raised at least $1.38 billion by selling XRP tokens without registering as a security. A security is a financial asset that allows investors to profit.
In response, Ripple said that the SEC’s theory that XRP is an investment contract, is wrong. They claim XRP should be treated in the same way as Bitcoin and Ethereum. News of the lawsuit, sent the price of XRP spiralling down. However, things started looking up when the presiding judge denied the SEC access to financial records linked with Ripple co-founder Chris Larsen and CEO Brad Garlinghouse. Both are named defendants in the case.
Even though the case is far from over, the crypto community is optimistic that the case will eventually be dismissed. Already the price of XRP is up 218.21% in the past 14 days.