The cryptocurrency XRP hit $ 1 on Tuesday morning EDT. The rise in price has resulted in the value of each coin increasing by over 38 percent in the past 24 hours and by more than 72 percent in the past week.
The total value – or market capitalization – of all XRP tokens in circulation was more than $ 45.5 billion. That had fallen to $ 42.4 billion at the time of writing.
According to price tracking site CoinMarketCap, XRP temporarily became the fourth highest cryptocurrency in the world in terms of market capitalization, just ahead of the other cryptocurrency tethers. Tether again overtook XRP later that morning when its price fell below $ 1.
The price increase comes as part of an ongoing lawsuit involving Ripple Labs – the developer of XRP – and the Securities and Exchange Commission (SEC).
Over the weekend, Ripple won an offer to prevent its private emails from going public during the lawsuit. However, it is not clear whether this was the only reason for the price jump.
According to crypto news site Coindesk, previous pessimism about the price of XRP may have been US-centered as the currency is being suspended by many western trading platforms despite regulatory concerns and is still being traded by some platforms around the world.
What’s the lawsuit?
The SEC announced that it filed a lawsuit against Ripple Labs and two of its executives in December 2020. She claimed that XRP was a collateral and that the company raised more than $ 1.3 billion through sales of XRP tokens that the SEC labeled “unregistered”. ongoing supply of securities for digital assets. “
It adds, “The complaint alleges that the defendants failed to register their offers and sales of XRP or failed to meet an exemption from registration in violation of the registration requirements of the Federal Securities Act.”
Other popular cryptocurrencies such as Bitcoin and Ethereum are not treated as securities by the SEC because they are not controlled by any central authority – they are referred to as “decentralized”.
Bitcoin and Ethereum are also gradually minted in the course of time in a process known as “mining”, in which cryptocurrency enthusiasts create tokens essentially with computing power.
All 100 billion XRP tokens were created by Ripple at once in 2012. Ripple also controls a large chunk of the existing XRP tokens, leading to a debate about whether or not the cryptocurrency is decentralized.
Ripple is said to have put around 55 billion XRP tokens in an account and put some of them on the open market on a regular basis. There are currently around 45.4 billion in circulation.
XRP tokens are not to be confused with Ripple itself. The tokens were created as currency to enable financial transactions through Ripple’s digital payments network, which banks and other financial institutions can use to transfer money. The network is known as RippleNet.
A photo of a visual representation of an XRP token in gold and silver, taken in Katwijk, the Netherlands, in January 2021.
Yuriko Nakao / Getty