“XRP Is Security & Not Crypto Currency”, Says SEC; Sought To Institute A Lawsuit Against Ripple, Its CEO & Co-Founder
US SEC is likely to institute a lawsuit against Ripple over Ripple’s native currency, XRP. SEC considers “XRP” as “security” rather than a digital currency like Bitcoin.
Securities & Exchange Commission (SEC) had been the regulator of financial and securities in the US. The recent past history of SEC with crypto-exchanges and currencies had been one of unfriendly and perturbed. Filing of lawsuits and taking up the matter to the Court is rather usual for the SEC.
Ripple or XRP had been the third-largest and popular cryptocurrency in the world after Bitcoin and Ethereum. However, a dispute regarding the status of XRP had long been pending between Ripple and US SEC.
It had been alleged by SEC that XRP is a “security” for all intents and purposes. SEC alleged that under US law a “security” is required to be registered with the regulator. Before the security is registered with the regulator, it cannot be offered for sale and purchase in any circumstances.
Meanwhile, Ripple argued that XRP is not a security and should be treated in the same league as cryptocurrencies like Bitcoin and Ethereum. Ripple also contended that XRP is being offered globally, however, only in the US, it had been treated as a security.
Yet, Ripple at all times failed to convince the US SEC on one pretext or the other. The dispute remained to be unsolved between the two wherein the regulator is insisting upon treating it to be security.
As per recent developments over the dispute, it was informed that SEC intended to settle the dispute once and for all. It was reported that SEC had decided to take up the matter to the Court by instituting a lawsuit against Ripple. It was informed that in the lawsuit, Brad Garlinghouse and Chris Larsen, Ripple’s CEO & Co-founder, would also be arrayed as defendants.
Later on, it was confirmed by Garlinghouse that a notice had been received at Ripple’s head office. He informed that in the notice SEC had alleged that Ripple had violated securities laws of the US deliberately. The notice suggested that unregistered securities were offered in the US for sale and purchase by US consumers.
When the news of the proposed lawsuit surfaced on social, print, and electronic media, Ripple’s price went down immensely. It was reported that the drop was about 15% which took place eventually on Tuesday, December 22, 2020.
Later on, Garlinghouse was found tweeting on Twitter. In his tweet message, he said that an attack had been caused by the Chairman of US Regulator upon the entire crypto industry. He said that instituting a lawsuit against Ripple was the final nail in a coffin.
CEO of Ripple also stated that the Regulator had miserably failed to differentiate between a security and a currency. He argued that in other jurisdictions XRP had been treated not as “security” then how SEC had been treating it otherwise.
The story is still continuing.