The regulatory dispute between Ripple and the SEC is about to reach a conclusion. What are the chances of success for both sides?

Recently, an important lawsuit in the cryptocurrency field is about to reach its conclusion. The long-standing legal dispute between Ripple and the U.S. Securities and Exchange Commission ( SEC ), which has lasted for more than two years, is expected to conclude in June or July of this year. This highly watched case not only concerns the fate of Ripple but could also have far-reaching implications for the regulatory landscape of cryptocurrency in the United States.

The price of the XRP token, which is central to the case, has experienced significant fluctuations recently. Last week, XRP saw a notable increase, but this week it has fallen to its lowest point since March. This dramatic price volatility reflects the market's high sensitivity and uncertainty regarding the outcome of the lawsuit.

To review the origin of this lawsuit, we must trace back to December 2020. At that time, the SEC accused Ripple of violating federal securities laws, arguing that its sale of XRP to investors and the profits derived from it constituted unregistered securities trading. The SEC's position is based on the "Howey Test" principle, which holds that if the development of a digital asset relies on the efforts of a specific company, and investors have a profit expectation from it, then it should be considered a security.

However, Ripple insists that XRP is a currency for cross-border payments, not a security. The company believes that regulators should not unilaterally determine the nature of digital assets; such judgments should be based on legislation rather than personal opinions. Ripple CEO Brad Garlinghouse has repeatedly emphasized this point.

SEC Chairman Gensler stated that the existing securities laws are sufficient to cover most activities in the crypto market, and there is no need for additional legislation. He believes the SEC has the authority to determine which digital assets fall under the category of securities. This viewpoint has sparked widespread controversy in the crypto industry, with many concerned that overly strict regulations could stifle innovation.

The focus of the debate between the two parties is not limited to whether XRP is a security, but also involves who has the authority to classify digital assets. This is a significant issue concerning the interests of crypto companies and exchanges; for U.S. regulators, it relates to the distribution of regulatory power. The outcome of this case is likely to set the tone for future U.S. crypto regulation and affect the development direction of the global crypto market.

Recently, a report investigating Ripple's business practices has sparked new discussions. The report indicates that Ripple has been selling large amounts of XRP through its partners and questions the company's presentation of its core business data. Ripple responded by stating that the company's goal is simply to promote the use of XRP, rather than profiting from sales.

As the case is nearing its conclusion, market expectations for the outcome are becoming increasingly diverse. Some observers believe Ripple may win, a view that briefly boosted XRP prices. However, some legal experts predict the case may end in a draw, arguing that some of the SEC's points are contradictory.

Regardless of the final outcome, this lawsuit will be an important milestone in the history of cryptocurrency regulation. It is not only about the future of Ripple and XRP, but also an important reference for the regulatory framework of the entire industry. As the ruling date approaches, both the crypto community and regulators are keeping a close eye on this case that will have far-reaching implications.