Despite Ripple encountering turbulent times facing a lawsuit from the Securities Exchange Commission (SEC), the firm has reported a surge in the total number of XRP whale wallets.
A May 6 Ripple Q1 2021 report noted that during the quarter, the total number of XRP whales increased by 3.5% from 308 to 319. These wallets are holding over 10 million XRP. In other news, wallets that are holding between 1 million to 10 million XRP also increased from 1,125 to reach 1,196.
In the same report, Ripple mentioned that the entry of institutional investors had a major impact on the crypto with investors accumulating more of XRP amid the market rally. Open interest in XRP futures also doubled from around $250M to $500M during the quarter amid the institutional uptake.
The Legal Battle With The SEC
The increase in the number of whales is an indicator that investors may not be perturbed by the lawsuit. At the moment, Ripple is embroiled in a legal tussle with SEC over claims that the firm violated investor protection laws when it sold XRP.
In December 2021, SEC sued Ripple, its Chief Executive, Brad Garlinghouse, together with its founder, Chris Larsen, for engaging in the business of an unregistered securities offering by selling XRP.
A majority of the analysts and commentators view this legal battle as a critical indicator of how the SEC will regulate the general crypto market. Following the initiation of the lawsuit, the price of XRP, then the third-biggest crypto by market cap, lost 60% of its value, losing its position to Litecoin. Moreover, U.S. cryptocurrency exchanges reacted by delisting XRP.
This lawsuit also resulted in Ripple losing some major partnerships. In Q1 2021, money-transfer firm MoneyGram International terminated its partnership with Ripple, Nevertheless, Ripple bought 40% of Asia’s cross-border payments firm, Tranglo.
XRP now ranks as the fifth-biggest crypto with a market cap of $72.7 billion following the massive spike in the value of meme-inspired Dogecoin (DOGE).