Ripple’s case against the US Securities and Exchange Commission is perhaps the most important lawsuit for the cryptocurrency industry, or at least ranking high up that list.
The company scored a major win against the Commission earlier this year, but at what cost?
Ripple’s Partial Victory v. SEC
Back in July, the presiding judge, Analisa Torres, ruled that secondary sales of XRP didn’t constitute an investment contract.
What this meant for Ripple was, essentially, that they could continue selling XRP to the public without the fear of prosecution. Of course, the SEC is currently appealing this decision, and we have yet to see the outcome of the case, but the news was largely perceived as positive.
An added benefit was that a lot of the major exchanges, which had previously delisted XRP under fear of the outcome of the lawsuit, re-listed it for trading following the ruling.
This led to a huge spike in demand for XRP, doubling its price overnight.
But What’s the Cost?
There are two sides to this story. CryptoPotato reported earlier in August on the thoughts of John Deaton – a well-known pro-Ripple attorney who represents tens of thousands of XRP holders – on the damage that the case has done to the company already.
He alleged that the case has greatly hurt XRP’s adoption, among a myriad of other negative consequences.
But there’s a literal cost of this lawsuit for Ripple.
Most recently, Fortune reported that the legal bills for the company have racked up to a whopping $200 million.
At the recent Mainnet conference in the US, CEO Brad Garlinghouse said that “you have to stand up to a bully,” but apparently, the price of standing up amounts to almost a quarter of a billion dollars. That’s a lot of money. It’s money that the company could have spent on development, talent acquisition, or any other activity that may have helped the industry as a whole.
Although, there’s a case to be made that Ripple’s spending on this case is a positive for the industry if the company wins.