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Ripple Being Sued by a Disgruntled Investor?

ripple

One important thing that you have to know about the cryptocurrency market is that it is highly volatile. Investing money that you are not willing to lose is something that you should never do. Partly, Warren Buffet is correct if he considers the crypto market as a gamble and not an investment.

However, it is true that cryptocurrencies do have potential. In fact, ex-Trump advisor Gary Cohn is even positive that there will soon be a cryptocurrency for the world. And though he doesn’t think that it’s Bitcoin, he believes in the potential of blockchain technology.

In fact, other than Bitcoin, there are other cryptocurrencies that are presenting solutions to the table. Cheaper transaction fees and faster transactions are just some of the things offered by these cryptocurrencies. One of which is Ripple. Ripple is known for its cross-border payment capability.

However, Ripple is currently dealing with a lawsuit coming from a disgruntled investor. And whether Ripple admits it or not, this has an effect on the digital currency’s price. The value of XRP was down by 0.83% and is just valued at $0.803. The lawsuit was filed under the premise that XRP is a security.

SEC Scrutiny on Ethereum

Ripple isn’t the only one that is dealing with this type of problem. In fact, Ethereum is also dealing with additional scrutiny by the SEC. If Ethereum has been considered as a security and not a commodity, then this could change the landscape of things for ICOs and even for Ethereum.

A test that determines a cryptocurrency whether it is a security or not is the Howey test. This test will determine whether or not the financial transaction qualifies as an investment contract which then falls under security.

At the moment, XRP is viewed by investors negatively because of this lawsuit. There are already news outlets that are speculating what could happen in case XRP is considered a security. Of course, this could be disastrous to the current price of XRP. However, if the court proves that XRP isn’t exactly a security, then its price could definitely skyrocket.

Experimenting with Cross Border Payments

According to IMF Deputy Managing Director Tao Zhang, he confirmed that a group of central banks is now working on digital cross-border systems. In a speech for Atlanta Federal Reserve Bank Conference, he mentioned that “In fact, a group of central banks is actively experimenting with the use of digital currencies and distributed ledger technology with the aim of making cross-border payments more efficient”.

And to no surprise, Rippel announced a few weeks ago that it has been collaborating with different central banks including that of Saudi Arabia central bank and also Bank of England.

Saudi Arabia isn’t a stranger to blockchain startups. Saudi Ministry of Communications and Information Technology has partnered with ConsenSys which is a Brooklyn-based production studio that is focused on building enterprise software via Ethereum.

And for this reason, it isn’t exactly surprising why Saudi’s central bank is teaming up with Ripple in order to improve cross-border payments. Once applied, this could allow faster, cheaper, and more transparent transactions.

At this point, cryptocurrencies such as Ripple and Ethereum are in a limbo. If both aren’t considered a security, then we can expect that their respective values are going to spike up. It is also possible that it can get adopted to process cross-border transactions making it possible to eliminate expensive fees.

Janneke Eriksen

Janneke is a writing ninja and has vast experience in journalism, specifically in the crypto space. As a blockchain believer and avid Bitcoin fan, she’s incredibly excited to share to our readers the latest news around so they are always updated wherever they are.

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