What happened
Ripple’s XRP ( XRP -0.60% ) token is making big gains in Saturday’s trading. The digital token’s price was up roughly 8.3% over the previous 24-hour period as of noon ET Saturday.
XRP’s token is posting big gains following favorable developments for Ripple and key company executives in their legal case with the Securities and Exchange Commission (SEC). Per the case, the SEC alleges that Ripple, its CEO Brad Garlinghouse, and its executive chairman Chris Larsen carried out an unregistered securities offering totaling $1.3 billion in value through distributions of the XRP token.
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So what
The judge struck down a motion filed by the SEC to prevent Ripple from using its “fair notice” defense, which states that the company lacked reasonable notice “that its conduct was in violation of law, in contravention with Ripple’s due process rights.” In a message published on Twitter, Ripple CEO Brad Garlinghouse described the judge’s action as a huge win for the company. Garlinghouse also said in a follow-up tweet that, “while we would have preferred the cases against Chris and me to end now, the SEC must now prove its claims. We are confident that ultimately all of them will be dismissed.”
Ripple’s general counsel Stuart Alderoty said that the judge in the case’s recent order highlighted the question of whether the SEC had provided Ripple with sufficient notice that the company’s distributions of XRP would be prohibited by securities law.
Now what
The SEC’s suit against Ripple, Garlinghouse, and Larsen has created uncertainty surrounding XRP’s outlook. The judge’s order means that Ripple can proceed with fair-notice argumentation in the case and have it used in the determination of a verdict, but investors should know that it doesn’t necessarily mean the company will ultimately prevail in the matter.
Even with today’s gains, XRP’s token price is still down roughly 4% year to date and 77% from the lifetime high that it hit in January 2018. Ripple now has a market capitalization of roughly $38 billion, and it ranks as the sixth-largest overall cryptocurrency by valuation.
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