Things are not looking good for Ripple’s XRP. Following the news that the United States Securities and Exchange Commission (SEC) has pressed formal charges against the company, its native cryptocurrency tanked by almost 70%. This has also led to another somewhat unexpected event as Litecoin (LTC) takes the seat of the fourth-largest cryptocurrency by market cap.
Litecoin has become the fourth-largest cryptocurrency by means of total market capitalization. This follows a month of positive developments for the coin which is up more than 55% in the past 30 days.
Of course, the increase in LTC’s price is far from being the main reason for that. Ripple’s XRP, which occupied this spot until a few moments ago, has shrunk by a tremendous 70% over the past week. At the time of this writing, LTC’s total market cap stands at $8.14 billion, while XRP is behind with about $7.9 billion according to data from CoinGecko.
Things took a turn for the worse for XRP proponents earlier this month when the US watchdog, the Securities and Exchange Commission, pressed formal charges against Ripple. The SEC alleges that the company has conducted an unregistered securities offering worth $1.3 billion, essentially saying that it considers XRP to be a security. While Ripple has already said it intends to fight the suit, the damage appears to have been done.
Many exchanges, including the leading one in the US, Coinbase, already announced that they will halt XRP trading soon, causing a massive bloodbath for investors.
It’s also worth noting that there are some other big names in the industry, including Kraken, with serious exposure to the US market, who are still to announce their plans. If they follow Coinbase and Bitstamp, chances are that the price will suffer even more.
Although many claim that XRP isn’t a security, this remains to be proven in court and a legal battle of this magnitude can easily take years to resolve. Even if Ripple manages to disprove the claims and establish that XRP isn’t a security, the future is looking grim at best for XRP.
