The world of cryptocurrency has changed in some major ways over the past year – especially during the past month. The pandemic undoubtedly accelerated the wider adoption of Bitcoin and crypto in general. The price of Bitcoin increased by over eight times since one year ago, as large institutions and Wall Street investors poured substantial liquidity into the digital coin. Buying crypto became easier with more platforms selling it, including PayPal, as well as Coinbase. And the first professional football player began receiving part of his salary in Bitcoin.
This is all great news, which highlights the growth and potential of crypto. Behind this story, as with any positive development is another side that lurks behind it. XRP, once a shining star among many crypto enthusiasts became the target and parting shot of the departing SEC chairman. Ripple was sued by the agency for selling an unregistered security. Shortly after, Coinbase announced that it would suspend XRP trading and delist it from its exchange. The price of XRP plummeted more than 65% in the last 30 days and its future remains uncertain.
According to Joshua Frank of the crypto research company known as The TIE, “XRP’s market cap has fallen by 93% from $137B to under $10B [since its all-time high in 2018]. That makes the value of the XRP collapse bigger than Enron and Worldcom. While not a bankruptcy, XRP is effectively the third largest collapse of all time behind Lehman Brothers and Washington Mutual.”
The true reasons why the SEC would sue Ripple and seek to bar its leadership from the digital asset space are debatable. While the alleged violation of a nearly century-old, outdated securities law remains technically valid in courtrooms, the timing and selection of the target of the agency’s wrath suggest something deeper. Perhaps the generally crypto-friendly SEC Chairman sought to send a message to banks and institutional powerbrokers who traditionally controlled finance and banking that their beloved XRP would not be permitted to thrive in the new age of equity and freedom that crypto offers. Ripple was among the most compliant crypto coins, filing regulatory banking paperwork for years to avoid legal issues, after the US Treasury deemed XRP to be a form of currency and not a security.
Alternatively, the SEC may have sought to fire a parting shot at the crypto community as a whole. They may have selected Ripple as their convenient “big fish” as a scapegoat, to send a message to other unregistered digital coins that they could be next. Their $10 billion market cap was large enough to make them an easy target.
Whatever the reason may be, this tale reinforces some important concepts for the crypto community. Behind all the convenience and ease of public exchanges and compliant platforms is the painful reality that your money is not truly as safe with them as they would like you to believe. In biblical parlance, the SEC giveth and the SEC taketh. When a bank or exchange makes a deal with the SEC to register and remain compliant with their insatiable and ever-growing appetite for more regulation and control, the outcome is that coin holders lose.
Owning private digital coins and using hard wallets, which are encrypted and stored locally on one’s device, are the only ways to ensure one’s freedom and to maintain the highest levels of privacy. The publicly traded exchanges and platforms will hastily act to preserve their own credibility whenever a threat from government agencies loom. How can anyone feel safe entrusting their hard-earned money with centralized platforms who will decide how your crypto wallet and trading should be conducted?
This is all a big part of the reason why META 1 Coin Trust operates in a jurisdictionless space, with a private exchange and hard wallets. The fallout of XRP serves as a proof of concept for META 1 and demonstrates why we are poised to succeed where others have failed. As a digital coin that was built with protections from its start to avoid the fate of XRP, META 1 Coin will lead the future of cryptocurrencies as we drive abundance and freedom for Humanity.