Popular mega-cap cryptocurrency XRP (XRP 0.85%) has been making some serious headlines of late. However, the world's sixth-largest token by market cap has continued to decline from its March peak today, dropping 7.4% over the past 24 hours as of 12:30 p.m. ET.
Notably, this drop is somewhat in line with the price action seen in the broader crypto market, which has dropped 5.7% over this same time frame. However, it's worth noting that XRP actually has a rather strong catalyst many investors may want to consider.
This catalyst is tied to some updates provided last Friday on the ongoing case between the Securities and Exchange Commission (SEC) and Ripple, XRP's parent company. In this case, the SEC has alleged that Ripple executives engaged in unregistered securities filings, effectively deeming XRP a security. XRP executives have pushed back on this ruling, as it would be precedent-setting in this sector.
Notably, deadlines for discovery and other procedural elements of this case were provided, as well as some details on the answers provided by the defendants (Ripple) with respect to potentially having the case thrown out.
Additionally, Empower Oversight, an organization that attempts to be the "checks and balances to help curb abuse of authority," reportedly released SEC emails tied to this case to the public. Some of these emails found that former SEC official William Hinman, one of the individuals behind this lawsuit, reportedly violated various cautionary emails from the SEC ethics team, warning Hinman not to meet with his former employer. His former employer promoted Enterprise Ethereum, which wasn't deemed to be a security, according to the SEC.
This legal drama only seems to get juicier the longer it drags out. For investors in XRP, these developments certainly paint an interesting picture. At the very least, these updates don't appear to bode well for the regulators looking to claim XRP is a security.
The fact that Ethereum and other top tokens have not been targeted by the SEC, despite being large in size and scale, is something of a paradox investors in the crypto community have been contending with for some time. Accordingly, how this precedent-setting case is ultimately resolved will likely send ripples (no pun intended) through the crypto world.
It remains to be seen if the SEC will back down in this case, with what appears to be a rather interesting conflict of interest argument building for the defense. Given the current deadlines, it appears this case has at least one more month to go before a decision is made. However, as we've seen in the past, deadlines can change, and this saga could continue even longer.
These developments are undoubtedly bullish for XRP investors. Of course, given the price action of other risk assets today, investors seem to be brushing aside any positive news. However, for those who have been looking for a catalyst to jump on with XRP, this news certainly seems like exactly what many investors were looking for.
That said, until this legal issue is officially resolved, XRP will remain on my watch list. This is a token with either massive upside or significant downside from here. Right now, the market doesn't seem to be in the mood to rally higher, so investors may need to be patient for a few days with XRP.