The XRP token surged over 20% in the past 24 hours after reports of its issuer, Ripple, being well-placed to win a landmark case with the U.S. Securities and Exchange emerged on Tuesday.
The SEC sued Ripple in 2020, alleging the firm sold unregistered securities.
On Wednesday, XRP traded at 45 cents with over $5 billion in trading volume. Over $17 million worth of XRP-tracked futures were liquidated as some traders were likely caught off guard, Coinglass data shows.
Earlier this week, Ripple defendants submitted a new filing in support of their fair notice defense. The filing referenced rulings on SEC objections in the Voyager Digital Holdings bankruptcy case. It noted that in rejecting the SEC's objections, Judge Michael Wiles of the U.S. Bankruptcy Court for the Southern District of New York endorsed many of the arguments that Ripple defendants have presented.
Traders likely reacted to rumors of the case already being settled on paper, some market observers said.
“We’re seeing the XRP price jump by double digits and rally above its long-held resistance levels, as rumors filter through that Ripple and the SEC have possibly agreed to a settlement,” Henry Liu, CEO of crypto trading platform BTSE, wrote in a Telegram message to CoinDesk.
“At the same time, others are speculating that Ripple could even emerge victorious from the court battle. Regardless of which faction is correct, the presumed resolution of the case in Ripple’s favor is driving this positive momentum,” Liu added.
Ripple has historically maintained a distance from its relation to XRP, the token that powers some of Ripple’s products and the XRP Ledger network. Any progression in the case causes XRP price movement, however.
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