XRP of Ripple is going down rapidly. Lost 40% value in less than 3 days when US SEC suggested it will be filing a lawsuit against Ripple and its executives. But trade volumes show an increase as it reached US$4.85 Billion in a day which is supposed to be due to its low price.
In 2018 a dispute arose between US Securities & Exchange Commission (SEC) and Ripple over the nomenclature of Ripple’s native currency, XRP.
It was alleged by SEC that by all means XRP wa not a digital currency but securities. SEC stated that being a “security” Ripple was required to seek prior consent of the Regulator. It said that the permission was a condition precedent before presenting XRP in the US market for the use by consumers. However, in the absence of such approval, the presence of XRP in the US was against the law, said SEC.
On the other hand, Ripple contended that SEC misunderstood the status of XRP which is a digital currency like Bitcoin. It was relentlessly argued by Ripple that XRP cannot be treated as securities by any stretch of imagination under US law. However, the dispute could not be settled between the two and recently a legal notice had been sent by SEC to Ripple.
Through the legal notice, Ripple and its executives had been called upon to explain why action should not be taken. It was furthermore stated in the notice that a fine of US$ 1.3 Billion had been levied upon Ripple. When the news of Ripple being sent a legal notice by SEC surfaced online, instantly the price of XRP went low considerably.
In less than three days since December 21, about a 40% low had been witnessed in the value of XRP. It seemed as if the announcement of the filing of a lawsuit against Ripple had seriously damaged the overall value of XRP.
Feeling aggrieved, Ripple’s CEO, Brad Garlinghouse, spoke publicly against SEC. He said that the US Regulator as well as its sitting Chairman had not been acting partially against Ripple. He accused the Chairman of being bias against Ripple and its executive, in particular its CEO and co-founder Chris Larsen. Garlinghouse said that he had failed to understand how SEC could treat something as security which is treated as currency worldwide. He stressed that XRP should have been treated like Bitcoin and Ethereum by SEC.
Later on, VitalikButerin – developer of Ethereum – also gave his viewpoint on Garlinghouse’s take on his coin. Buterin said that Garlinghouse is trying to compare his worthless coin with the likes of Bitcoin and Ethereum. Buterin added that though people are using XRP but that won’t allow Ripple to breach SEC’s law because it involved public interest.
On the other hand, CEO of Galaxy, Mike Novgratz said that he was wondering what took SEC so long to correct the wrong.
This is a continuing story which will be updated till further information.