The price of Ripple (XRP) exploded in July after an American judge ruled that the asset was unsafe on certain counts.
It has now erased those gains and is currently one of the worst performing cryptocurrencies from last week.
At the time of writing, XRP was trading for $0.48 according to CoinGecko. That's an 8% discount over seven days.
Following the court's decision, the asset rose to $0.82. Institutional investors have poured cash into the asset, and Ripple general counsel Stu Alderotti said he expects US banks to back the fintech firm's on-demand liquidity (ODL) product.
But after that it decreased by more than 40%.
In the year In 2020, the US Securities and Exchange Commission (SEC) hit Ripple with a $1.3 billion lawsuit for misleading investors and selling unregistered securities in the form of XRP.
But in July, a federal district judge wrote a partial ruling that programmatic sales of XRP to retail investors did not qualify as securities.
Although the judge ordered the sale of $728 million worth of unregistered securities to institutions, investors and Ripple Labs interpreted the decision as positive.
Regarding Institutional Sales, Torres wrote: “Thus, taking into account the economic facts and general circumstances surrounding Institutional Sales, the Court concludes that Ripple's Institutional Sales of XRP offer and sale of unregistered investment contracts are in violation of Section 5 of the Securities Action.”
In the days after the ruling, SEC Chairman Gary Gensler said he was “disappointed” by Judge Torres' decision. At the time, in July, when asked about whether to file an appeal, the commission added that it was “looking at it and evaluating that option.”
The fintech company behind the asset, Ripple Labs, was launched to help banks and other financial institutions move faster and with much lower fees.
XRP is still more than 85% above its 2018 all-time high of $3.40.
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