We will not go into details about the adjudication. After all, people are interested in the substance. The SEC believes that Ripple’s currency, XRP, is a security, i.e. something like a stock, and is attempting to prove it in court. For its part, Ripple rejects this accusation and is fighting its own battle to be vindicated.
Why should the cryptocurrency industry care?
Why is it a problem for XRP to be judged as security? If it is judged as such then it means that it will have to stop trading within the US on cryptocurrency exchanges.
And why should the outcome of this court battle be of interest to the entire cryptocurrency industry?
Because if the court concludes that XRP is security, then the blow will be powerful, not just for Ripple, but for the entire cryptocurrency industry. The SEC is not going to stop at XRP but will go after almost all cryptocurrencies. And such a development will have immeasurable negative consequences.
Read Also: If Ripple loses lawsuit, cryptocurrency company behind XRP moves abroad
In essence, the SEC is attempting to prove that there is an entity behind XRP (Ripple) that is influencing the price path of XRP and that it is deriving financial benefit from that path. If the SEC succeeds with Ripple, it is assumed that it will follow the same path with other cryptocurrencies.
However, if Ripple wins, then it will be a big win, not only for Ripple, but for the entire cryptocurrency industry. It will pave the way for mass adoption.
Of course, there is also the possibility of an outcome that will neither deal a huge blow to cryptocurrencies, nor will it open wide the way for them to dominate. Any predictions are dicey for now.
Bitcoin, Ethereum and others
From this battle, it seems that the only cryptocurrency that is not at all at risk is Bitcoin, which is considered and is highly decentralized and thus it is almost impossible to identify an entity that influences it in a large or decisive way.
Beyond that, Ethereum has strong advocates for its designation as a “commodity” (like Bitcoin) rather than security, and there are some other blockchains or cryptocurrency projects that seem to have achieved a good degree of decentralization (it is risky for now to name names).
Read Also: Bitcoin, Ethereum and others are not considered securities in Belgium
The agony of the decision
In summary, the course of cryptocurrencies through 2023 will also depend on the outcome of the Ripple vs SEC court battle.
The majority of the industry is anxiously awaiting the conclusion of the legal process and hopes that the Ripple side will be able to create a wall of protection around the valuable and promising cryptocurrency projects.
