Ripple's legal defeat could have a strong, negative impact on XRP

Ripple, the cryptocurrency startup that had created the world’s third-largest coin, XRP, is no stranger to legal issues. The company, its officials, and even its coins have been accused of many things, from market manipulation to being a pure scam. However, Ripple usually managed to deal with legal cases that were targeting it and come out on top. This time, however, the firm’s motion to dismiss a major XRP securities lawsuit was denied by a federal judge in the state of California, which ended up being a major blow to the company. Those who have followed the development of the case may remember that the company made a last-ditch attempt to stop the lawsuit a few months ago, in December 2019. Then, on January 16th, 2020, the judge Phyllis J. Hamilton took the company’s motion under submission. However, after long consideration, the judge still ruled against the firm, noting that the arguments that Ripple had provided were not persuasive enough to dismiss the suit. The judge stated that, based on the plaintiff’s complaint and the facts proffered, the court was not able to conclude that the company’s public offering of XRP occurred before August 5th, 2016. Ripple did not suffer a complete defeat, however, as the judge did dismiss several state-level claims. But, another complaint can still be filed within 28 days, which would cause a further pursue of the claims.

Ripple’s defeat could have major consequences for XRP

As many likely already know, the first class-action lawsuit against Ripple was filed by investors who accused the firm of tricking them into buying XRP as an unregistered security. Ripple has been denying this from the start, but if the coin does end up recognized as security, its value could completely collapse. While many are looking to the US regulators to decide on the nature of the coin, they were unable to bring any additional clarity regarding XRP’s status, as of yet.