A few days ago, XRP’s price experienced an uptick after reports that it was almost winding up its legal battle with the Securities and Exchange Commission (SEC). The latter filed the lawsuit in 2020 accusing Ripple of launching an unregistered security offering.

The lawsuit has been leaning in favor of XRP’s status as a digital currency rather than the SEC’s claim that XRP should also be subjected to the same laws that govern securities issuance. The SEC is determined to maintain close oversight on Ripple, a move that gained favor with the judicial system after a ruling that will allow regulators to acquire XRP transaction information overseas.

Ripple had filed a motion that sought to deny the SEC of any right to MOUs to foreign regulators requesting their assistance in acquiring Ripple transaction information. Judge Sarah Netburn turned down the motion and instead allowed the SEC to win. She noted in her ruling that the SEC is allowed to seek the information. However, she also noted that the ruling should not be viewed as an abuse of the court’s jurisdiction. Judge Netburn also mandated the SEC to provide documents of previous requests for information on Ripple in 14 days.

What does the judicial ruling mean for Ripple?

Ripple’s recent judicial blow is a concern to existing and potential investors over too much regulatory interference. The ongoing lawsuit has already been a deterrent to some investors worried about the impact of the case on the company’s plans and its future. The legal battle not only slows down planned development but could also scare away potential investors.

The Ripple Vs. SEC case has attracted a lot of attention not only from the Ripple community but also from the international community as it is the first legal case of its kind. The final ruling is expected to set precedence for future legal proceedings regarding cryptocurrencies. The main aim of the case is still to determine whether XRP is a security or a transaction.

Ripple argues that XRP is a cryptocurrency just like ETH and Bitcoin. Still, the SEC argues that the cryptocurrencies mentioned above did not have a central institution benefiting from their launch. Ripple previously criticized the SEC for not offering a fair warning of security laws violations for XRP transactions in the first few years after its launch.

Ripple’s goal is to partner with banks to facilitate faster transactions through the Ripple Network. Such collaborations would secure Ripple’s role and influence in the banking industry, but the ongoing legal battle threatens such partnerships. It has already teamed up with over 300 financial institutions to facilitate low-cost and real-time cross-border remittance. An unfavorable judicial ruling would likely discourage investors and partners, especially those in the banking segment, thus disrupting Ripple’s plans, which is why the judicial ruling is critical to the project’s future.

The court ruling has already hurt XRP’s performance, whose price dropped significantly in the last 12 hours due to diminishing investor confidence and uncertainty about Ripple’s future. XRP is already down more than 22% in the last 24 hours, continuing its more than 35% decline in the last seven days.

Ripple’s current woes seem to have watered down attempts to reach its previous high of $1.88, which it achieved on April 13 this year. Wednesday’s crypto sell-off pushed it down to a low of $0.85, at which it bounced back after testing resistance. There was some recovery on Thursday, but the news of the SEC’s win has introduced more uncertainty, reflecting XRP’s bearish performance on Friday morning. Fortunately, it has experienced limited selling pressure indicated by the volume.