XRP update: Ripple win in landmark SEC case likely puts XRP and crypto market in jeopardy for these reasons
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XRP is not a security after Ripple scores a landmark win against the SEC.
Experts argue that XRP’s non-security status implies Ripple founders and the firm cannot be held accountable for large volume sales of the token.
The judgment opens more crypto projects and traders to pump and dump schemes with zero accountability or recovery from the founding team.
Ripple's win in the Securities & Exchange Commission (SEC) lawsuit has already drawn criticism from the crypto community. Experts speculate that Ripple’s status as a non-security gives XRP and its founders a free pass to dump their token holdings, adding to selling pressure across exchanges.
Previous instances of crypto founders and developers “pumping and dumping” tokens have resulted in massive losses for market participants. XRP’s status as a non-security is likely to promote such projects, negatively influencing market participants in the ecosystem.
Also read: XRP naysayers miss out on 70% gains after Ripple Labs and SEC share joint victory
XRP's “non-security” status could jeopardize other cryptocurrencies for this reason
Crypto market participants rejoiced following the ruling, pushing XRP price up 74% at times. However, several experts in the crypto community have taken the contrarian stance. These pundits have examined Judge Torres’ ruling on XRP and identified the loopholes that could negatively impact traders in the ecosystem.
Antonio Juliano, founder of dYdX, believes that if a token like XRP that has no discernible purpose except for it to be dumped in the open market is not a security, then how does that help other cryptocurrencies.
Juliano’s statements warn crypto market participants of “pump and dump” schemes in the market.
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