The news that the United States Securities and Exchange Commission had issued a lawsuit to XRP token parent company Ripple and its two top executives, sent shockwaves throughout the crypto industry.
But its domino effect is only just starting, according to the analyst who ahead of time called the recent Coinbase “delisting” that sent XRP teetering possibly past the point of no return. The analyst warns that the SEC is “sniffing around a number of projects and companies” throughoutt the crypto industry. What could be coming next for the emerging asset class that is suddenly facing its most stringent regulatory scrutiny yet?
Regulatory Ripple Effect Is Just Beginning For Crypto Companies And Altcoin Projects
The SEC has slapped Ripple with a lawsuit alleging the XRP token it sold to investors is actually an unregistered security. The implications of XRP being deemed an unregistered security forced the hands of popular crypto exchanges who had to delist the asset in haste.
Just as fast as the ripple effect spread across exchanges announcing the coming delisting, investors scrambled to cash out their XRP coins in droves sending the price down to bear market lows.
Related Reading | Here’s Why The XRP Securities Suit Is Worse Than Past SEC Charges
It took mere days to reach a low that previously took more than a full year of down-trending price action to get to. The forceful negative momentum is nearly pushing XRP out of a pitchfork channel that it has spent its entire existence trading inside. A close outside of it would take the token back to only pennies per coin.
At this point, the lasting negative impact on XRP could make it a lost cause, but what is more frightening is what the SEC has planned for the rest of the market.
The altcoin is facing a dangerous fall out of its long-term pitchfork channel | Source: XRPUSD on TradingView.com
Analyst Who Predicted Coinbase XRP Delisting Expects More From SEC Against Crypto Companies
While the rest of the cryptocurrency industry has mostly sat, watched, ate popcorn, and pointed a finger to laugh at the Ripple situation, with a “told you so,” mentality, participants are failing to realize the potential domino effect this could have.
The SEC took more than 6 years to make such a judgment on XRP and did so at a time when Bitcoin and crypto are more bullish than ever. Coincidence? Conspiracy theory? Who knows, but the timing is suspect.
With crypto back in the limelight, the dollar dying, and Bitcoin emerging as a most pandemic resilient asset in finance, could the SEC be attempting to take the momentum out from under Bitcoin, by targeting companies and projects it has a chance at controlling?
Related Reading | Ripple Lawsuit Triggers XRP Led Altcoin Apocalypse
Protecting retail investors wasn’t the motivation here, as those who bought “Ripple” when instructed by CNBC in 2018 were the ones hurt most by this sudden regulatory overreach by the SEC – so what exactly was the motivation?
Analyst Adam Cochran also claims the SEC isn’t done yet, and “is far more active than we thought and sniffing around a number of projects and companies.”
Cochran stops short of revealing any details further, claiming to be confirming facts and sources before breaking the “scoop” to the masses. Speculation immediately looked toward the titans of the industry, such as Tether.
And while that’s another demonized token the crypto market is probably better off without, its sudden destruction would no doubt be catastrophic for Bitcoin and the entire industry. Let’s hope that’s not where the SEC turns their sniffing next.
Featured image from Deposit Photos, Charts from, TradingView.com
by Tony Spilotro on December 30, 2020 at 01:30AM
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