Key Takeaways:
The price of Ripple (XRP) surged to a yearly high of $0.83, adding double digits to its value over the past 24 hours following reports of a potential resignation by the U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler. The cryptocurrency powering the Ripple blockchain has been the best performer among the top 10 major cryptocurrencies.
XRP Price Soars 20% Amid Reports of Gary Gensler Stepping Down As SEC Chair
Ripple’s surge to a six-month high reflects a notable shift in market sentiment. Gary Gensler’s resignation has spurred positive market sentiment within the cryptocurrency sector as investors speculate on a more crypto-friendly regulatory approach from the Trump White House.
Gensler signaled a departure from his role as the SEC chairman during remarks at the 56th Annual Institute on Securities Regulation conference on Thursday. His statement touched on various topics, including US capital markets, corporate governance, and disclosure rules. However, what struck the most was the ending of his speech, where he said it was an honor to serve with the agency “doing the people’s work”.
In what may well be a farewell speech, the SEC chairman highlighted the agency’s various regulatory efforts, such as reforms in the $28 trillion US Treasury markets, updates to the $60 trillion equity market, and its ongoing work to ensure fairness for both investors and issuers.
Speaking on crypto assets, Gensler addressed the financial watchdog’s continued focus on enforcement, noting that since 2018, crypto-related cases made up 5% to 7% of its overall enforcement efforts. He stated that the industry had been causing “significant” harm to investors while arguing that a vast majority of crypto tokens don’t appear to have proper use cases.
The SEC boss pointed to the cases involving crypto firms, including Binance, Coinbase, and Ripple Labs, where the courts agreed with the agency’s actions to protect investors. He also reiterated previous statements that Bitcoin was never treated as a security by the Commission while emphasizing a regulatory focus on other crypto assets.
It was during Gensler’s tenure that the SEC approved the first-ever Bitcoin futures exchange-traded fund (ETF) and later authorized exchange-traded products (ETP) backed by Bitcoin and Ether. He highlighted that these regulated investment products are providing US investors with the benefits of “disclosure, oversight, lower fees, and greater competition” while offering safe and secure exposure to the crypto market.
Closing his statement, Gensler acknowledged the challenge that lay ahead for the Commission, particularly with the rapid evolution of financial technologies like blockchain and cryptocurrencies.
Ripple Labs v SEC Could End As New SEC Chairman Comes On Board
Ripple Labs, the company behind the Ripple blockchain and XRP token, has faced long-standing regulatory scrutiny from the SEC. The regulator sued the firm in December 2020, accusing it of violating federal securities laws by engaging in the sale of XRP to investors through crypto exchanges, raising upwards of $1 billion in the process.
The SEC claimed in court that it considers XRP a securities asset, a statement Ripple argued against by showing comments by former SEC Commissioners suggesting that cryptocurrencies like Bitcoin and Ethereum are commodities, rather than securities.
In July 2023, Ripple got a partial win over the regulator after the Judge overseeing the case ruled that the firm’s sale of XRP tokens on secondary marketplaces could not be viewed as a securities transaction and did not violate federal laws. The SEC has since appealed the ruling and the case is still ongoing.
However, Gensler’s potential exit could pave the way for a more favorable outcome for Ripple. The XRP price rally also coincides with another favorable ruling for Ripple, where the court granted the company and its CEO, Brad Garlinhouse, a stayed judgment on class claims filed against them. This ruling also reflects a legal victory for Ripple Labs and its executives, allowing them to move toward a final resolution while temporarily halting specific claims.
The court’s decision effectively supports the company’s claim that XRP transactions on secondary exchanges don’t qualify as securities offerings. This stance could further boost the price of XRP.
Whale Activity On XRP Increases As Investors Speculate A Bull Market
Meanwhile, substantial whale activity has been detected for XRP, adding more fuel to the token’s price movement. One transaction saw 105 million XRP, valued at approximately $76.5 million, moved from the Binance exchange to an unknown wallet. Such large-scale transactions are signs of potential accumulation by massive holders, indicating that the tokens are being stored for long-term price gains.
Moving XRP from exchanges to self-custody wallets reduces its immediate availability for trading, which can increase upward price pressure if demand for the asset continues to grow. This reduction in liquid supply, combined with favorable developments from the SEC is seemingly preparing XRP for a bull run.
At the time of writing, Ripple (XRP) is trading at $0.7995 – up 16.28% in the last 24 hours.
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