Cryptocurrency market chaos: Lawsuit against Ripple, XPR sinks

blue ripple xrp symbol

U.S. Securities and Exchange Commission after allegations that it violated investor protection laws – Ripple says ‘weird timing’

Ripple, the $10 billion fintech company best known for the cryptocurrency XRP is facing a lawsuit.

As the company [Ripple] announced, it is awaiting the filing of a lawsuit by the U.S. Securities and Exchange Commission following allegations that it violated investor protection laws.

Specifically, the Securities and Exchange Commission is preparing to file lawsuits against Ripple’s CEO, Brad Garlinghouse, and co-founder Chris Larsen. It will allege that the company violated laws against the sale of unregistered securities when it sold XRP to investors.

Garlinhouse said he expects the lawsuit before Christmas, and in a statement notes that the SEC’s lawsuit was fundamentally wrong while questioning the timing.

“XRP is a currency and does not need to be recorded as an investment contract,” he said. “In fact, the Justice Department and the Economic Crime Response Network (the U.S. Treasury Department) have already ruled since 2015 that XRP is a digital currency and other G20 regulators have done the same. No other country has registered XRP as a title.”

“The Securities and Exchange Commission has allowed XRP to operate as a currency for over 8 years and we wonder what the incentive is for this initiative a few days before the change of administration. Instead of providing a clear regulatory framework for cryptocurrencies in the US, SEC president Jay Clayton inexplicably decided to sue Ripple — effectively leaving the legal job to the next administration.”

Last month Clayton announced he was stepping down as SEC chairman at the end of the year, and his term formally ends next June.

With a market capitalization of more than USD 20 billion, XRP is one of the most valuable cryptocurrencies in the world. It was created and distributed by Ripple’s founders in 2012 and was designed to facilitate quick cross-border payments.

According to Ripple, the SEC plans to argue that the XRP is a title and that Ripple violated U.S. laws by not registering the currency with the Securities and Exchange Commission before making the initial public offering.

Ripple argues that XRP – like bitcoin – should be classified as a currency and does not need to be registered as an investment contract.

#XRP – like #Bitcoin – should be classified as a currency and does not need to be registered as an #investment contract.

Why Does it Matter?

Why does it matter whether the “investment title” sign is put on XPR?

Because it will put it under strict rules that will seriously hurt Ripple, even though it claims to be independent of the cryptocurrency.

Ripple owns 55 billion of the total $100 billion it owns. XRP currencies that exist, and it also generates revenue from the sale of some positions in XRP every quarter.

The price of the XRP fell significantly after news of the expected lawsuit. Today it is down more than 17% and trading around 46 cents. However since the beginning of the year it has gained about 140%.

Meanwhile, Bitcoin, which last week reached more than $23,000 today, fell more than 5% to $22,620. Ether, which is the second-largest cryptocurrency in market capitalization, fell 7% to $595.


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