(Bloomberg) — A little-known cryptocurrency at the center of a major legal battle in the industry is leading the latest rally in digital assets amid speculation that the company behind it could soon reach a deal with U.S. regulators.
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XRP has rallied nearly 40% in the past week to reach around 60 cents, while the market cap is up about 12% in the same period. The cryptocurrency has rallied this week in part on expectations that Donald Trump will be more tolerant of the sector if he wins the U.S. presidential election.
The Securities and Exchange Commission filed a lawsuit against Ripple Labs in 2020, alleging that the firm violated its rules when it raised money by selling the digital token without registering it as a security. The case is being closely watched because of its implications for the SEC’s jurisdictional scope. In what many see as a loss for the agency’s jurisdiction, a U.S. District Judge ruled last July that sales of XRP to retail investors on exchanges did not amount to investment contracts.
Helping to fuel that assumption is a listing on the SEC’s website that a “closed-door meeting” is scheduled for July 18, according to posts on social media platform X. An SEC spokesperson declined to comment.
“Investors and traders are waiting for a conclusion to be reached on the status of XRP tokens,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “Everything about XRP depends on what the regulations will be.”
A Ripple Labs spokesperson has not yet responded to a request for comment.
Ripple Labs recently announced in a petition that it is donating $1 million to a new super political action committee to unseat anti-crypto Senator Elizabeth Warren and support John Deaton as the next senator from Massachusetts.
According to data compiled by CoinMarketCap, XRP is the sixth-largest cryptocurrency with a market cap of around $34 billion. Bitcoin is valued at around $1.3 trillion, accounting for around 50% of the crypto market, according to CoinMarketCap.
–With assistance from Chris Dolmetsch.
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