The news that the US Securities and Exchange Commission had filed a lawsuit against XRP token parent company Ripple and its two top executives sparked shock waves across the crypto industry.
The domino effect is only just beginning, however, according to the analyst who called the recent Coinbase delisting a “delisting,” where XRP may have gone past the point of no return. The analyst warns that the SEC is “snooping on a number of projects and companies” across the crypto industry. What could come next for the emerging asset class suddenly facing its toughest regulatory scrutiny yet?
The regulatory ripple effect is just beginning for crypto companies and altcoin projects
The SEC has beaten Ripple with a lawsuit alleging that the XRP token sold to investors is in fact an unregistered security. The impact of XRP being classified as unregistered security put the popular crypto exchanges, which had to delist the asset in a hurry, into their hands.
Just as quickly as the ripple effect spread to the exchanges and announced the impending delisting, investors scrambled to cash out their XRP coins in droves, bringing the price down to market lows.
Related reading | Here’s why the XRP securities suit is inferior to the previous SEC fees
It took just a few days to hit a low that had been marked by declining price movements for more than a full year. The strong negative momentum pushes XRP almost out of a pitchfork channel in which it has spent its entire existence. A deal outside of that would bring the token down to just a few cents per coin.
At this point, the ongoing negative effects on XRP could lead to a lost cause. More terrifying, however, 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 firms
While the rest of the cryptocurrency industry has mostly sat, watched, ate popcorn and fingered the ripple situation, participants fail to realize the possible domino effect this could have.
It took the SEC more than 6 years to make such a judgment on XRP, at a time when Bitcoin and crypto are more bullish than ever. Coincidence? Conspiracy theory? Who knows, but the timing is suspect.
Given that crypto is back in the spotlight, the dollar is dying, and Bitcoin becomes a hugely pandemic resilient asset in the financial sector, could the SEC try to reduce the momentum among Bitcoin by targeting companies and projects it can control ?
Related reading | Ripple Lawsuit Triggers XRP Led Altcoin Apocalypse
Protecting retail investors was not the motivation here, as those who bought “Ripple” on instructions from CNBC in 2018 were the ones most affected by this sudden regulatory overshoot by the SEC – so what exactly was the motivation?
Analyst Adam Cochran also claims the SEC is not ready and “is far more active than expected, sniffing a number of projects and companies.”
Cochran stops revealing further details and claims to confirm facts and sources before breaking the “shovel” on the masses. Speculation immediately turned to the titans of the industry like Tether.
And while this is another demonized sign that the crypto market is likely to be better off without, its sudden destruction would undoubtedly be disastrous for Bitcoin and the entire industry. Let’s hope the SEC isn’t snooping here next.
Featured image from Deposit Photos, Charts from, TradingView.com