SEC set to sue Ripple with XRP in the crosshairs

Ripple will be sued by the SEC for allegedly offering unlicensed securities in the type of XRP tokens, according to Fortune.In a move reminiscent of Coinbases recent front-running of a New York Times expose of its supposed treatment of workers of color, Ripple CEO Brad Garlinghouse has taken the uncommon step of posting to Twitter to apparently enact laws the concern in the court of public opinion.Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his last act – is choosing winners and attempting to restrict United States development in the crypto market to BTC and ETH. (1/3)— Brad Garlinghouse (@bgarlinghouse) December 22, 2020
Bitcoin and Ethereum have both escaped SEC enforcement due to their decentralized nature. However, XRP, the token associated with Ripple, has long been criticized by some members of the crypto community as extremely centralized. Ripple has actually preserved an escrow account of around 50 billion XRP, or around half of the total supply, which the CTO David Schwartz claims to have actually been gifted by the creators of the third-largest cryptocurrency.Despite class-action claims and acrimonious splits in between the initial founders, Ripple has made it through to turn into one of the fintech industrys richest business, with a reserve– mainly held in XRP– that could in theory be worth nearly $25 billion, even after a significant 13.5% drop in the price of the cryptocurrency token following the news of the prospective lawsuit.A source with connections to Ripple told Cointelegraph that:”Theres no chance it [XRP] is not a security.”Ripple posted a Wells submission file to its site explaining its position, claiming that “By declaring that Ripples circulations of XRP are investment agreements while preserving that bitcoin and ether are not securities, the Commission is selecting virtual currency winners and losers, ruining U.S.-based, consumer-friendly innovation in the process.”The business continued to allege, without evidence, that Bitcoin and Ether are “two Chinese-controlled virtual currencies that the SEC has actually stated are not securities” which “Innovation in the cryptocurrency industry will be totally delivered to China” should the possible claim brought by the SEC be successful.According to Fortune, both Garlinghouse and co-founder Chris Larsen, whose combined wealth is estimated at $13 billion, are expected to be named as defendants in the possible lawsuit.Although Garlinghouse has specified that Ripple would continue to grow even with a security designation for XRP, the business has recently declared to be seeking new headquarters beyond the United States, claiming that a lack of regulative clearness was requiring its hand.Cointelegraph reached out to Ripple for discuss whether Larsen and Garlinghouse would remain in the United States due to the possible claim, and had actually not received an action at the time of publication.

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