The US Securities and Exchange Commission (SEC) intends to sue Ripple over its sale of XRP, company CEO Brad Garlinghouse announced Monday.
Ripple and its difficult legal disputes
Ripple co-founders Chris Larsen and Garlinghouse will be named defendants along with the company, Garlinghouse said. "It's an attack on the entire cryptocurrency industry and American innovation," said Brad Garlinghouse.
Outside consultant Michael Kellogg, of Kellogg, and later the company itself, noted that other key US government authorities, including the Department of Justice (DoJ) and the Financial Crimes Enforcement Network (FinCen), have already determined that the 'XRP is a digital currency.
Therefore, buying and selling XRP does not fall within the scope of US government securities laws. Kellog reiterated that this is not the first time the SEC has overstepped the boundaries of its legitimate authority.
Courts have already intervened in the past and will do it again, he said. According to the Wall Street Journal, Ripple received news on Monday that the SEC intended to sue. Ripple was previously sued by XRP investors in an alleged class action lawsuit accusing the company of saying that XRP's price would rise.
That lawsuit, which began in 2018, is still pending in the courts. The company paid $ 700.000 in fines for charges of violating the Bank Secrecy Act promoted by FinCEN, as well as an additional $ 450.000 in fines to the US Attorney's Office for the Northern District of California. Regulatory action against Ripple could be part of a more general trend in the crypto industry.
The history of XRP
XRP was developed and launched by Ripple Labs co-founder Arthur Britto and chief technical officer David Schwartz in 2012. Ripple holds 55 billion XRP under warranty, releasing 1 billion every month. Unused XRP is returned to the security deposit.
According to Messari, Ripple has sold around $ 1,2 billion in XRP over the years. The price of XRP plummeted after news of the pending lawsuit, dropping 12% in 24 hours, reaching a price below 50 cents - here the quotation in real time.
The cryptocurrency's price had already started to fall earlier in the day, joining a broader market decline. In a recent statement by the company, attributed to Garlinghouse, it is stated that by giving the stamp of approval only to Bitcoin and Ether (whose networks are at the mercy of the Chinese Communist Party), the SEC picked the winners, ignoring an entire industry at the outside of these two tokens.
Ripple has announced that it will actively fight this battle in the courts, believing it is right, to get clear rules for the entire cryptocurrency industry in the United States.
