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The price of XRP has plunged after supporters of the cryptocurrency helped it recover from the drop it endured after the U.S. Securities and Exchange Commission (SEC) announced a lawsuit against Ripple Labs.
Data shows the cryptocurrency was trading at about $0.29 before the artificial price inflation, seemingly orchestrated in a Telegram group called “Buy & Hold XRP” with over 175,000 members, which saw it move up to a high of $0.759 on the Kraken cryptocurrency exchange, before plunging.
XRP’s price moved up about 160% in a short amount of time, before a sell-off ensued and its price corrected to, at press time, $0.381, a drop of about 50%.
The cryptocurrency’s price action seemingly suggests some XRP traders were anticipating the pump, and started it by buying XRP themselves to take advantage of it. While some investors may have made a profit, others may have bought XRP at much higher prices.
It’s currently unclear what triggered the massive sell-off. CoinDesk speculates an XRP whale took advantage of the rise and dumped a portion or all of its holdings on the market. The XRP trading group that orchestrated the pump and dump is seemingly still up.
As reported, on December 21 of last year, the SEC announced that it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”
The founder of TechCrunch, Michael Arrington, has questioned the lawsuit against Ripple, arguing the Howey test used to determine if an asset is a security is outdated. Arrington, it’s worth noting, is the founder of Arrington XRP Capital, a digital asset manager launched in 2017 using XRP to invest in blockchain technology.
While most crypto exchanges delisted XRP in response to the lawsuit, others have sided with Ripple, arguing that the SEC’s move hurt XRP investors. Crypto exchange Uphold pointed out that the SEC’s goal is to protect consumers, and believes it’s hard to see “how a judgment rendering XRP essentially worthless and inflicting billions of dollars of losses on retail investors” would square with that goal.
The price of XRP is currently close to $0.40 after recovering from a $0.33 low, seemingly after the Kuwait Finance House (KFH) announced that it had successfully launched instant cross-border payments service to KFH-Turkey using Ripple’s technology.
Featured image via Pixabay.