Ripple CTO Issues Warning Against XRP Scams Amidst Surge in Price
Ripple CTO David Schwartz has issued a warning regarding a new wave of scams targeting investors amid the recent court ruling in favor of Ripple Labs.
"A lot of scammers are taking advantage of the recent good news to try to cheat and steal," Schwartz said in a Friday tweet. "There are no airdrops, giveaways, or special offers associated with this ruling."
The warning came after Ripple Labs scored a victory in the US District Court in the Southern District of New York on Wednesday, with Judge Analisa Torres ruling partially in favor of the company in the case brought forth by the Securities and Exchange Commission.
The positive news led to an initial surge in the price of XRP, the native token of Ripple, which rallied over 70% — bringing up its value from $0.47 to $0.82 in a day.
The incident also marks the biggest price jump for XRP in the past year.
The hype around XRP also attracted the attention of bad players, who are trying to dupe unwary investors by imitating the company.
In such cases, scammers often promote fake giveaways and airdrops. They intend to gain access to the potential victim’s crypto wallets, which would be used to drain existing tokens or siphon stolen funds at a later date.
Back in April, the popular YouTube channel DidYouKnowGaming was hacked and started promoting an XRP-related scam.
The channel was accessed by a hacker who changed its profile image to the logo of the XRP cryptocurrency and intended to promote a scam related to the token.
YouTube eventually intervened and restored the channel.
Ripple Scores Win Against the SEC
According to documents filed on Thursday, Judge Torres has granted summary judgment in favor of Ripple Labs, ruling that the XRP token is not a security but only in regards to programmatic sales on digital asset exchanges.
However, the federal judge ruled that XRP is a security when sold to institutional investors, as it met the conditions set in the Howey Test.
The SEC-Ripple case refers to the ongoing legal battle between the SEC and Ripple Labs, the creators of the cryptocurrency XRP.
The SEC has accused Ripple of conducting an unregistered securities offering, as they believe XRP should be classified as a security rather than a cryptocurrency.
The case is important for the crypto industry because its outcome could potentially set a precedent for how cryptocurrencies are regulated in the United States.
On the other hand, if Ripple wins, it could potentially challenge the SEC's authority and determine the regulatory landscape for the industry.