Despite Ripple facing a lawsuit from the Securities Exchange Commission, the company has reported a surge in the number of XRP whale wallets.
Ripple’s Q1 2021 report published on may 6th notes that during the quarter, the number of XRP whales surged 3.5% from 308 to 319. The wallets are holding at least 10 million XRP. Elsewhere, wallets holding between 1 million to 10 million XRP also increased from 1,125 to 1,196.
In the report, Ripple acknowledged that the entry of institutional investors had had a significant impact on the cryptocurrency with investors accumulating more of XRP amid the rally. Following the institutional uptake, open interest in XRP futures doubled from $250M to $500M during the quarter.
Ripple legal woes with SEC
The growth in whales is an indicator that investors might not be swayed by the lawsuit. Ripple is currently in a legal tussle with SEC over allegations that the company violated investor protection laws when it sold XRP.
In December 2020, SEC sued Ripple, its Chief Executive, Brad Garlinghouse, and its founder, Chris Larsen, for engaging in an unregistered securities offering by selling XRP.
Many analysts view the legal tussle as a key indicator of how the SEC will regulate cryptocurrencies.
Following the lawsuit, the price of XRP, which was the third-largest cryptocurrency by market capitalization, plunged 60%, temporarily losing its position to Litecoin. Furthermore, U.S. crypto exchanges reacted by delisting XRP.
The lawsuits also led to Ripple losing some key partnerships. During the quarter, money-transfer firm MoneyGram International terminated its partnership with the company. However, Ripple acquired 40% of Asia’s cross-border payments firm, Tranglo.
Following the spike in the value of meme-inspired dogecoin, XRP now ranks as the fifth-largest cryptocurrency with a market cap of $72.6 billion.