XRP has strengthened in recent days thanks to an uptrend in the broader cryptocurrency market. However, its prospects remain unclear amid the conflict with the SEC. The sale of tokens by Ripple’s management only exacerbates the situation.
The future prospects for XRP remain unclear after Ripple and the US Securities and Exchange Commission (SEC) announced on Monday that they were unable to agree on an out-of-court settlement.
Lawyers believe that the SEC case against Ripple could drag on for months or even years. All this time, the issue of recognizing XRP as a security will remain open, which will continue to limit its availability for trading and give rise to concerns among investors.
Further growth opportunities for XRP are severely limited due to the fact that the top managers of the project are leaking huge amounts. Over the past day, cryptocurrency exchanges received at least 20 million coins from Ripple CEO Chris Larsen, beincrypto writes.
Jed McCaleb, ex-CTO of Ripple Labs, remains the main seller of XRP. He regularly gets rid of billions of XRP by selling off his holdings. McCaleb is receiving tokens based on XRP trading volume and is estimated to dump about 3 billion coins to the market in the coming months.
Massive sell-offs could increase the pressure on XRP. McCaleb, however, is not overly concerned about the platform’s future. He’s just trying to sell his coins as much as possible and hopes to complete this process by the end of 2021.
Analysts believe that the sale of tokens by top managers of Ripple was one of the reasons that prompted the SEC to sue the company.
After the SEC brought charges, many exchanges and Ripple partners have suspended trading in the XRP token or removed it from the list of available instruments altogether.
Given the bleak outlook and token sell-off by the two largest holders, the year will be difficult for XRP retail traders.
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