In 2023, Ripple's capitalisation more than doubled to $37.2 billion. The SEC's weakening stance, which began its attacks on altcoins with XRP, and the company's new high-profile projects helped make this possible.
The regulator labelled XRP a security back in 2020 when it sued the company for allegedly illegally raising $1.3 billion in investments. The legal battle went on with mixed success until Ripple's lawyers found the regulator's weak spot: a speech by former SEC Director William H. Hinman, in which he referred to Bitcoin, Ethereum and XRP as commodities.
In 2023, Ripple sought Hinman's reports and a transcript of the speech through the court. The SEC built a defence around this being the "personal opinion" of a man who was "difficult to identify from the video". Investors sensed an imminent victory in May, and XRP skyrocketed 9% in 12 hours.
The market reacted even more to a court verdict in July when a judge ruled that selling XRP to retail investors didn't qualify as securities trading. On the same day, some crypto exchanges announced the return of XRP trading pairs, and the coin's price jumped by 70%.
After four years of litigation, the SEC backed down in October, withdrawing its claims that Ripple issued securities directed against CEO Brad Garlinghouse and Executive Chairman Christian Larsen.
A series of SEC court losses, including the high-profile scandal over the refusal to convert Grayscale's trust fund into a Bitcoin ETF, have exposed the regulator's weak position. The chances that the SEC will finally drop its claims against Ripple have increased several-fold this year.
Meanwhile, the company's management has wasted no time. HSBC, one of the world's 20 largest banks by capitalisation, recently announced a partnership with Metaco, a subsidiary of Ripple. Metaco will provide a solution for the bank to store tokenised securities.
Ripple also won the competition to become the sole technology partner of the National Bank of Georgia. The company will help the government issue and customise the circulation of the digital lari, the country's central bank digital currency. Montenegro, Palau and Bhutan had previously chosen Ripple for the same purposes.
Ripple's growing adoption significantly increases the chances of its imminent return to the Top 4 cryptocurrencies by market capitalisation. A major surge in investment interest is expected when the SEC withdraws its legal action against the company.
StormGain Analytical Group
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