XRP Investors Can’t Wait for January 20th

Bitcointhe world’s largest cryptocurrency, has had a stellar run this year, with its price up about 60%, well ahead of the bull market. But not all cryptocurrencies have done well. XRP (CRYPTO: XRP)the cryptocurrency created by the founders of Ripple Labs is down about 19% this year. It’s been a frustrating few years for XRP and Ripple, which are facing the fallout from a Securities and Exchange Commission (SEC) lawsuit that won’t go away. I’m sure many XRP investors are looking forward to January 20th next year. Here’s why.

Lawsuit

In late 2020, the SEC charged Ripple Labs and two of its executives, Brad Garlinghouse and Christian Larsen, with violating securities laws by raising $1.3 billion through various sales of XRP coins. The Securities and Exchange Commission (SEC) said that both executives and Ripple did not register the sales with the SEC and were not authorized to sell XRP without registration.

The cryptocurrency community has paid close attention to the lawsuit as its outcome could determine what regulatory jurisdiction the SEC may have over XRP and other cryptocurrencies. There is a lot of ambiguity when it comes to cryptocurrency regulation. Some, such as the SEC, believe that many cryptocurrencies should be regulated as securities. However, cryptocurrency supporters do not want to be under the auspices of the SEC, which, in their opinion, will lead to stricter regulation. Rather, they view many cryptocurrencies as currencies that should be regulated by the Commodity Futures Trading Commission (CFTC).

In July 2023, Ripple and its leaders won. U.S. District Judge Analisa Torres ruled that Ripple and its executives did not violate securities laws when they sold XRP on digital asset platforms. However, the SEC recently appealed the decision, saying it still believes that some of the actions of Ripple, Garlinghouse and Larsen constituted securities violations.

Why January 20th may be important

The US presidential election will end on November 5, with the final winner to be sworn in on January 20. A new president means a new administration that could change the regulatory approach to cryptocurrency and leadership at many agencies, including the SEC. Current Securities and Exchange Commission (SEC) Chairman Gary Gensler led the charge in the Ripple lawsuit and is considered public enemy No. 1 by many cryptocurrency stakeholders. Many would like to see Gensler removed and replaced with a more crypto-friendly leader.

A Donald Trump victory will likely be the most beneficial for XRP and crypto investors. Trump has publicly stated that he would like to remove Gensler from office and is also considered a more crypto-friendly presidential candidate. While it is unclear whether Trump will be able to fire Gensler before his term expires, the SEC chief has historically resigned when a new president takes office.

Even if Vice President Kamala Harris becomes president, Gensler could still leave. Billionaire investor Mark Cuban, a vocal supporter of Harris, said he believes Harris would fire Gensler if elected. Moreover, several reports suggest that Harris is considering candidates to replace Gensler if he is elected.

Looking forward to change

XRP investors will be eagerly awaiting a new administration that will replace Gensler with someone less focused on cryptocurrency regulation by the SEC. XRP will also benefit if this lawsuit ends and if it no longer serves as an example of the SEC’s efforts to expand regulatory powers over cryptocurrencies. The Trump administration will likely try to remove Gensler as quickly as possible. But Harris could follow a similar path. Either way, XRP investors can’t wait until January 20th.

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Bram Berkowitz has positions in Bitcoin and XRP. The Motley Fool has positions and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy.