The SEC's lawsuit against Ripple Labs has stirred much debate and questions from the outset. On the surface, it appears to be a regulatory move to protect investors, but some theories suggest that there is more behind it — potentially a political approach to suppressing the threat XRP poses to the traditional banking system.
XRP’s Efficiency as a Threat to Banking Profits
Ripple's XRP has become a serious contender in revolutionizing cross-border payments. Unlike the outdated SWIFT system that charges $20–$50 per transfer and takes days to process, XRP offers a faster and cheaper solution — just a few cents per transaction and near-instant settlement. With $70 billion in quarterly transaction volume, banks have had real cause for concern.
Strategic Underpinnings and Timing of the Lawsuit
In December 2020, just days before SEC Chairman Jay Clayton resigned, the SEC launched a lawsuit against Ripple, accusing it of selling unregistered securities. Critics point out Clayton’s ties to financial giants like Goldman Sachs, raising suspicions that this move was part of a broader strategy. Coincidence or not, Ripple's progress suddenly halted, and XRP's price dropped by 66%, with partnerships like MoneyGram being severed.
Ripple’s Resilience Amidst Legal Challenges
Despite burning over $200 million in legal fees, Ripple did not vanish from the market. In 2023, a partial legal victory ruled that XRP sales on secondary markets are not securities, which triggered a 73% surge in price. However, the damage was significant — XRP vanished from U.S. platforms, and many institutions became wary of Ripple, fearing regulatory backlash.
If the SEC's lawsuit was indeed a defense of the old guard, it will not last forever. The crypto world evolves too quickly. Ripple's mission remains strong, and as banks continue to grapple with blockchain adoption, XRP might just make a comeback story worthy of the history books. The question now is not whether Ripple can survive, but whether the legacy system can keep up.
