Why Ripple (XRP) is crashing today

The XRP (XRP -8.87%) The cryptocurrency, commonly known as Ripple, saw a sharp drop in price on Thursday. The currency, which serves essential functions in the RippleNet international payments system, has fallen as much as 11.9% in 24 hours. The price drop is the result of the Securities and Exchange Commission (SEC) filing an appeal in its long-running lawsuit against Ripple Labs.

The SEC process is still alive

Many Ripple investors expected the SEC process to continue its course this week as the deadline for appeals loomed on October 7. The SEC chose instead to keep the case alive, arguing that the $125 million penalty “conflicts with decades of Supreme Court precedent and securities laws.”

Ripple Labs representatives found the filing “disappointing” and not in the best interest of investors.

The price of the Ripple token rose 22% in two months as the deadline for appeals approached. The movement surpassed both S&P 500 index and Bitcoin above this range. Investors saw the federal court victory in August as a positive sign for the crypto industry in general and XRP in particular. The call took some of the optimistic wind out of those tilted sails.

How far will this case go?

The Ripple team now has 14 days to file cross-appeals for the parties they lost in the circuit court proceedings. Cases, arguments and judicial opinions will continue to flow for the foreseeable future.

Ripple Labs CEO Brad Garlinghouse vowed to keep fighting, but also noted that the initial verdict had already resolved many important issues.

“XRP’s status as a non-security is the law of the land today — and that’s not changing even in the face of this misguided — and annoying — appeal,” Garlinghouse wrote in an X post. “Remember that when the SEC tried by unsuccessfully filing an ‘interlocutory appeal’, they have made it clear that they have no intention of challenging XRP’s non-security status.”

So the saga of the SEC lawsuit continues. I’m no lawyer, but cases like this could end up in the US Supreme Court when all is said and done. This is a long process with many uncertain stops along the way.

Cryptocurrency investors crave regulatory and legal certainty, and this appeal will have the opposite effect. The bottom line is now back to “unpredictable” and today’s drop in the price of XRP tokens makes sense in this context.