The value of one of the world’s most valuable cryptocurrencies is plummeting, and a recent complaint to the SEC is behind the free fall. According to CoinMarketCap, the value of the XRP token has declined by over 42% in the past 24 hours and by over 63% from its 30-day high of $ 0.76. It now sits at just $ 0.27.
XRP’s price volatility has rivaled the most temperamental of cryptocurrencies. Since hitting an all-time high of $ 3.84 in January 2018, the coin has spent much of the past two years getting closer and closer to pennies. Over the past month, following major rallies in other cryptocurrencies, XRP had its biggest rally in years, but those gains were all wiped out this week by Ripple. CEO Brad Garlinghouse’s admission that the SEC was planning to file a major lawsuit against the company in the final days of the current administration.
The fundamental argument of the SEC is that XRP has always been a security and should have been registered with the commission from its inception over seven years ago. The SEC says the defendants in the case – namely the Ripple company, CEO Bran Garlinghouse and executive chairman Chris Larsen – have generated more than $ 1.38 billion from sales of the XRP token.
Ripple was recently valued at $ 10 billion after a $ 200 million funding round. Ripple and the XRP token are technically separate, but Ripple maintains a large total of the currency’s market cap and at one point the XRP token itself was called a ‘ripple’ and shared a logo with the company.
The company claims that XRP is not a security, but is actually a tool for financial institutions, although the coin’s volatility has discouraged banks from actually embracing the token. Meanwhile, XRP has a presence on a number of cryptocurrency exchanges, a fact that could expand the reach of this legal complaint and affect more players in the space.
In a blog post posted yesterday that went live shortly after the SEC’s complaint was filed, Garlinghouse wrote that the SEC’s allegations were “completely false on the facts and the law” “and that the society was “convinced” that they “would end up winning before a neutral investigator. “