The SEC could sue Ripple for securities violation in the near-future as CEO Brad Garlinghouse said in an interview that we discuss more about in our latest Ripple XRP news.
Garlinghouse said in an interview that the SEC could sue Ripple for offering unlicensed securities but the CEO said that he is willing to fight the lawsuits. Ripple’s cryptocurrency XRP which is the third by market cap, dropped by 13% as of today, after the CEO posted on Twitter.
FinCEN is proposing a rule on certain digital currencies that will protect national security, assist law enforcement and increase transparency while minimizing the impact on responsible innovation. https://t.co/ImE1B1jVRp
— Steven Mnuchin (@stevenmnuchin1) December 18, 2020
Garlinghouse told the Fortune Magazine expects that the SEC will sue the company for selling unlicensed securities and that he and co-founder Chris Larsen will be named as co-defendants in the lawsuit that will likely be brought up in the near future. The price of XRP Dropped by more than 15% as of Monday after the news emerged. Brad was told by a representative of the Commission that they will start filing lawsuits in federal district courts soon. In the prepared statement, the CEO and Ripple will fight back:
“The SEC is fundamentally wrong as a matter of law and fact. XRP is a currency and does not have to be registered as an investment contract. In fact, the Justice Department and the Treasury’s FinCEN already determined that XRP is a virtual currency in 2015 and other G20 regulators have done the same. No other country has classified XRP as a security.
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Ripple issued XRP back in 2012 and the SEC Thinks that the coin unlike BTC or ETH is secure and should have been registered with the Commission as such. Ripple has about 6.4 billion and it also sells crypt periodically to the public from the escrow account which holds another 48 billion. The issue here is that whether XRP is a currency or security was been argued for years among crypto supporters, as Michael Arrington who is the founder of XRP capital said:
“This is an attack on all of crypto. While other countries are embracing the future, the SEC continues to lash out in fear.”
This is an attack on all of crypto. While other countries are embracing the future, the SEC continues to lash out in fear. https://t.co/5TaTRBPqZZ
— Michael Arrington (@arrington) December 22, 2020
Garlinghouse also said that Ripple is preparing to fight the lawsuit because he believes he has to stand up for all of crypto and not let the SEC bully the entire industry. Ripple issued a statement after the news emerged:
“The SEC has permitted XRP to function as a currency for over eight years, and we question the motivation for bringing this action just days before the change in administration. Instead of providing a clear regulatory framework for crypto in the U.S., [SEC Chairman] Jay Clayton inexplicably decided to sue Ripple–leaving the actual legal work to the next Administration. This is an attack on the entire crypto industry and American innovation.”
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