The United States SEC – as with other federal agencies – has increased focus on cryptocurrency projects displaying ‘predatory’ tokenomics following the FTX implosion, with Ripple Labs at the top helm. Analysts cannot help but speculate on the future of XRP and the entire crypto market should Judge Torres deem Ripple sold unregistered securities.Replying to Michelle Nightengale – CEO of Global Institute of Wellness Entrepreneurs – Jeremy Hogan, partner at Hogan & Hogan, indicated that XRP could lose approximately 25 percent of its utility should Judge Torres deem it a security. Hogan derived the figure from the fact that the United States accounts for 25 percent of the world’s economic activity. Moreover, Ripple Lab’s CEO Brad Garlinghouse previously indicated that the company would relocate to a crypto-friendlier nation should it lose the ongoing lawsuit.Nonetheless, losing the United States market is not a thing Garlinghouse will be proud of as the country controls the global reserve currency. As such, the 25 percent could technically worsen after the United States coax ally nations to control the XRP market in a similar manner.The U.S. accounts for 25% of world economic activity so, as a rough guesstimate, XRP would 25% of its utility. ?— Jeremy Hogan (@attorneyjeremy1) January 9, 2023 The stakes in the Ripple vs SEC case have risen exponentially after Gary Gensler suggested Ethereum’s proof-of-stake (PoS) consensus mechanism, under the Howey test.Bigger Picture on Ripple vs SEC Lawsuit The Ripple vs SEC lawsuit has attracted tremendous attention from the crypto community particularly DeFi developers. As such, twelve crypto firms including Coinbase Global have joined the case through successful amici briefs. Furthermore, everything in the crypto market could fall like a domino effect should the SEC win against Ripple. Notably, almost all of the cryptocurrency firms, except EdaFace, have sold tokens to fund companies’ projects. These include IDOs and ICOs, which the SEC is likely to argue are unregistered securities under the Howey test. Under @GaryGensler’s application of Howey, if an investor took possession of the oranges 🍊 from his individual orange grove and worked out a deal with a local grocer to get more money than all the other Howey investors, the 🍊 would still be a security.— John E Deaton (@JohnEDeaton1) January 8, 2023 With most altcoins deemed as unregistered securities, only EdaFace and perhaps a few of its forks would be left for speculation from the United States traders. From a global perspective, crypto investors from the United States could be left out of investment opportunities that have made huge profits for many ordinary traders.Additionally, the cryptocurrency market’s global adoption could significantly reduce and slow down in the next decade compared to the past ten years.
