SAN FRANCISCO– Friday, July 19, 2024– The price of cryptocurrency XRP dropped 9% on Wednesday after a closely watched meeting between the US Securities and Exchange Commission (SEC) and Ripple Labs was canceled.
The meeting, which had fueled speculation of a settlement in the ongoing legal battle between the SEC and Ripple, was abruptly removed from the SEC’s website, according to news reports.
XRP, which has been at the center of the dispute, had seen a recent price surge in anticipation of a resolution.
The Securities and Exchange Commission filed a lawsuit against Ripple in late 2020, alleging the company violated federal laws by raising $1.3 billion through the sale of its token without registering it as a security.
The case is closely monitored due to its implications for the SEC’s jurisdiction. A U.S. district judge ruled last July that sales of XRP to retail investors on exchanges did not constitute investment contracts, a significant setback for the regulator.
A federal judge last year ruled in favor of Ripple on a key point, stating sales of XRP to retail investors were not investment contracts.
However, the dispute continues regarding the appropriate remedy for unregistered sales to institutional investors.
With the meeting canceled, investors were left in the dark about the lawsuit’s progress. A court decision on the remaining issues in the case is expected soon, possibly by the end of July.
The latest dispute centers on the remedies for unregistered sales to institutional investors. The SEC is seeking a multi-million-dollar fine, while Ripple argues that any civil penalty should not exceed $10 million.
