Brad Garlinghouse, CEO Ripple.
John Chiala | CNBC
The Securities and Exchange Commission on Tuesday filed charges against Ripple, the best-known fintech company for XRP cryptocurrencies, and two of its directors for alleged violations of investor protection laws.
The SEC claimed that Ripple, co-founder Christian Larsen and CEO Bradley Garlinghouse, raised more than $ 1.3 billion through an unregistered securities offering.
“We allege that Ripple, Larsen and Garlinghouse failed to record their ongoing supply and sale of billions of XRPs to retail investors, which deprived potential buyers of adequate disclosures about the XRP and Ripple business and other important long-term protections. , which are fundamental to a robust public market system, “Stephanie Avakian, director of the SEC’s Enforcement Division, said in a press release.
Garlinghouse had expected a lawsuit to be filed before Christmas. In a statement Monday, he said the SEC’s intended trial was “fundamentally wrong in law and in fact” and questioned its timetable.
“XRP is a currency and should not be registered as an investment contract,” Garlinghouse said.
XRP was created and distributed by the founders of Ripple in 2012 and is designed to facilitate fast cross-border payments. The value of the currency against the US dollar has doubled since the beginning of November, due to the increase in the last part of that month, but fell by more than 80% from its peak at the end of 2017, while rival cryptocurrency Bitcoin recently hit great of all time.
The company has recently been valued at $ 10 billion and is backed by Japanese financial services giant SBI Holdings, Spanish bank Santander and top venture capital firms, including Andreessen Horowitz, Lightspeed and Peter Thiel’s Founders Fund.
Ripple ranked 28th on this year’s CNBC Disruptor 50 list.
– Ryan Browne and Kate Rooney from CNBC contributed to this report.
Subscribe to CNBC on YouTube.