The Securities and Exchange Commission (SEC) is escalating its legal dispute with Ripple Labs. In its recent court filing, the SEC focused on the blockchain company's proposed stablecoin.

Is Ripple facing more problems?

The SEC, in its redacted remedies reply brief submitted on May 7, referred to Ripple's upcoming token as an "unregistered crypto asset." However, the SEC did not explicitly mention the term "stablecoin."

It's worth noting that the SEC cited Ripple's press release from April 4 instead of directly identifying it. Ripple had announced its plan to launch a dollar-pegged digital asset, but no further details have been provided so far.

The SEC argues that Ripple's proposal to launch a stablecoin is clear evidence of the firm's intention to continue engaging in unregulated activities if a permanent injunction is not granted.

The regulator stated that injunctions are readily issued in such cases due to the high likelihood of recurrence. The SEC claims that Ripple's main business has historically involved unregistered institutional sales of XRP and will continue if an injunction is not imposed.

What's happening with XRP?

The long-standing legal battle has negatively impacted XRP's growth in the cryptocurrency market. XRP's price has fallen by 15% year-to-date (YTD) while Bitcoin and Ethereum have seen gains of over 47% and 33%, respectively, during the same period.

XRP experienced some gains over the past 7 days, increasing by over 6% during the recovery rally. However, its price dropped by 2% in the last 24 hours. At the moment, XRP is trading at an average price of $0.52, significantly lower than its all-time high of $3.84 in January 2018.

The 24-hour trading volume of XRP has decreased by 34% to $1.15 billion, and it currently holds a market cap of about $29 billion.

As Bitcoin continues to reach record highs, Ripple's entry into the stablecoin market occurs amidst legal troubles with the SEC. The SEC is seeking $2 billion in penalties from Ripple for allegedly selling unregistered securities. Despite the legal battle, Ripple remains dedicated to challenging the SEC's allegations in court.