While most cryptocurrencies are enjoying a bullish trend, XRP is out of the question in this celebration of life as Ripple's management is actively selling their coins
Despite the correction from December lows in the area below $0.20, the Ripple project token (XRP) dropped from third place in the capitalization rating to seventh. XRP / USD is currently trading at $0.54, and the value of all coins in circulation is $24.536 billion.
Further opportunities for XRP growth are severely limited by the fact that the project's top managers are draining huge sums of money.
Over the past day, at least 20 million coins have been transferred to cryptocurrency exchanges from Ripple CEO Chris Larsen. This is about $10 million.
Larsen and other executives have poured hundreds of millions of XRP into the market in the past, undercutting the coin's fragile position.
The main seller of XRP is still former Ripple Labs tech director Jed McCaleb. He regularly gets rid of billions of XRP by selling off his holdings. McCaleb is receiving tokens based on XRP trading volume and is estimated to dump about 3 billion coins to the market in the coming months.
Massive sell-offs could put more pressure on the XRP exchange rate. But McCaleb isn't too worried about the future of the platform. He is simply trying to market his coins as much as possible and hopes to complete the process by the end of 2021.
XRP sales and conflict with the SEC
Ripple's management has come under scrutiny by the Securities and Exchange Commission (SEC). Analysts believe that token sales by top executives were one of the reasons that prompted the regulator to sue the company.
XRP has been under a lot of pressure over the past few months because the SEC considers the token a security. That means Ripple has had to register it and get permission to sell it. Larsen is among the company executives the SEC accuses of enriching themselves at the expense of retail investors.
Traders in danger
With both Larsen and McCaleb actively divesting themselves of XRP, it is unlikely that Ripple will be able to resolve their conflict with the SEC anytime soon. Both sides have published a joint letter stating that they are unable to come to an agreement and fundamentally disagree with each other's positions. It is still unclear whether the case will be resolved in pre-trial proceedings, but for now both sides are preparing for a lawsuit.
After the SEC filed charges, many exchanges and Ripple partners have suspended trading in the XRP token or removed it from the list of available instruments altogether. When dealing with securities, companies need to meet additional requirements and ensure compliance with regulations and laws.
It's difficult, expensive, and time-consuming, so some projects are trying to avoid it. Given the gloomy outlook and the sell-off of the token by the two largest holders, it will be a difficult year for retail XRP traders.
