Just weeks ago, XRP was outperforming Bitcoin, and everything Ripple related was coming up roses. However, less than 10 days ago, all of that came crashing to an abrupt end.

It emerged that the U.S. Securities and Exchange Commission (SEC) was building a case against Ripple, and its two most senior executives, over securities fraud.

“The complaint alleges that Ripple raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide. Ripple also allegedly distributed billions of XRP in exchange for non-cash consideration, such as labor and market-making services.”

The news shocked the cryptocurrency world. More so, the timing of the announcement, in that the SEC leadership has just weeks left before leaving office, with the rest of the Trump administration.

The XRP price suffered tremendously. From its mid-November year to date high of just under $0.80, XRP has plummeted as low as $0.1686 at one point. This represents a 79% drop.

Today sees some semblance of a fightback, with the price up 2% in the last 24-hours to $0.2198 at the time of writing.

Each passing day sees another crypto exchange either suspend or removed XRP trading altogether. Yesterday was the turn of Binance U.S., who elected to delist XRP with effect from January 13, 2021.

According to crypto researcher Larry Cermak, that leaves Kraken as the only big exchange serving U.S. users wishing to trade XRP. However, Cermak is of the view that Kraken will fall in line with the others soon.

Kraken is now officially the last major exchange serving U.S. customers that hasn't yet delisted XRP. Coinbase, Bitstamp, Bittrex, Binance US, FTX US all delisted already. Announcement must be imminent.

— Larry Cermak 🟨 (@lawmaster) December 30, 2020

The latest development sees a pre-trial conference set for February 2021, in which all parties have the opportunity to discuss the path forward.

While Garlinghouse has been silent on the matter since Christmas Eve, it looks as though this case will go all the way to court.

What’s particularly worrying for XRP holders is that the SEC has rarely lost a court case. And never one involving cryptocurrency security tokens.

To determine what could happen to Ripple requires looking at past cryptocurrency-related run-ins with the SEC.

YouTuber Ben Armstrong, also known as BitBoy Crypto, posted a video on just that. In it, he refers to cases involving Tezos, EOS, Telegram, and Kik.

In the case of Tezos and EOS, Armstrong pointed out that both companies caved in and paid their respective settlements. Meaning neither firm went as far as going to court.

Whereas Telegram and Kik opted to challenge the SEC.

The outcome for Telegram saw the court side with the SEC, resulting in a civil penalty of $18.5 million and the return of $1.2 billion to investors on the sale of unregistered Gram tokens.

In the case of Kik, the court also sided with the SEC over charges of illegally selling its unregistered Kin tokens. A $5 million penalty was levied against the firm.

As such, while Garlinghouse says, “we are not only on the right side of the law, but we will be on the right side of history,” the truth of the matter is that the SEC has a strong track record.

With that, the odds are stacked heavily against Ripple.

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