The Securities and Exchange Commission intends to sue Ripple in federal civil court for the sale of unregistered securities, according to a press release published online by the cryptocurrency company late Monday. Ripple defended its cryptocurrency, known as XRP, as a valid currency, but then went into a conspiracy-laden language, saying that competing currencies like bitcoin and ethereum they are “controlled by the Chinese.”
The impending SEC process revolves around the question of whether cryptocurrencies like Ripple XRP are primarily investment contracts that should be regulated by the federal government, or mainly currencies that can get rid of multiple rules regarding financial disclosure to investors.
While bitcoin, the most famous blockchain-based currency, was released in a decentralized manner by a pseudonymous programmer, XRP was launched in 2012 by Ripple Labs, and San Francisco-based Ripple is still the largest owner of XRP. The digital asset is the third largest cryptocurrency in the world after bitcoin and ether.
Brad Garlinghouse, CEO of Ripple, defended the company in a series of tweets late Monday, claiming that outgoing SEC President Jay Clayton he “chose winners and tried to limit US innovation in the crypto industry,” supporting only bitcoin and ether.
“The SEC – apart from other G20 countries and the rest of the US government – should not be able to choose what innovation looks like (especially when their decision directly benefits China). Make no mistake, we are ready to fight and win – this battle is just beginning “, Garlinghouse posted on Twitter.
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Garlinghouse, who previously served as senior vice president at Yahoo and president of mobile communications at AOL in the 2000s and early 2010s, only suggested in his tweet at something that was much more explicit in the company’s press release – namely, the fact that China somehow controls bitcoin and ether.
“XRP consistently ranks among the top three virtual currencies in terms of market capitalization – along with bitcoin and ether, the two China-controlled virtual currencies that the SEC has said are not securities,” Ripple said in a statement. a six-page defense posted online.
Ripple did not immediately respond to a question via email early Tuesday about how bitcoin and ether could be controlled by the Chinese government. The SEC process has not yet been filed, however Reuters reports that it could come immediately this week.
Wall Street Journal, who was the first to report the news, notes that while the SEC has tracked several digital currency traders in recent years, Ripple is the largest cryptocurrency company to attract unwanted attention from the feds. Ripple was valued at $ 10 billion in 2019. Ripple co-founder Chris Larsen will be named in person along with Garlinghouse, according to the WSJ.
Cryptocurrencies fell overnight at the news of the imminent action of the SEC against Ripple, with bitcoin falling by more than 5% and ether down over 7%. XRP also fell in price late Monday and early Tuesday. Even without SEC action, more investors bitcoin was expected to collapse after recently reaching a record high of $ 23,000.