The SEC has formally filed charges against Ripple and its two top executives.
The SEC alleges that Ripple and its officers sold $1.3 billion of unregistered securities by selling XRP.
CEO Brad Garlinghouse claims that XRP is a currency like Bitcoin and Ethereum and should not be regulated by the SEC.
The Trust Project is an international consortium of media Bitcoin Profit software organisations based on transparency standards.
The Securities and Exchange Commission (SEC) has officially announced that it will file a complaint against Ripple Labs Inc, its co-founder and former CEO Christian Larsen, and current CEO Brad Garlinghouse.
The news comes after recent rumours that the SEC was preparing to file these charges, which Garlinghouse felt were unfair. The SEC accuses Ripple and associated parties of having raised more than $1.3 billion of funds through the sale of „ongoing digital asset offerings“.
In addition to attacking Ripple Labs Inc. for financing the organization through the sale of unregistered securities, the SEC is also attacking two of the company’s key executives.
Coming directly from the SEC’s official press release, the release states :
According to the complaint, in addition to structuring and promoting sales of XRP used to finance the company’s operations, Larsen and Garlinghouse also made unregistered personal sales of XRP totaling approximately $600 million.
The press release continued, with Stephanie Avakian, Director of the SEC’s Enforcement Division, commenting: „We allege that Ripple, Larsen and Garlinghouse failed to register their current offer and sale of billions of XRPs to retail investors, depriving potential purchasers of adequate information about XRPs and Ripple’s business. »
Chris Larsen Ripple XRP
The SEC in the hunt
The SEC has already been successful after cryptomonic companies for the sale of unregistered securities. Such examples include the Telegram TON token, Salt Blockchain, BitClave and BCOT.
The regulator is now focusing on the fourth largest cryptogram by market capitalization, XRP.
Since rumours began spreading the day before about a lawsuit against Ripple, XRP has seen its share price drop by 25%.
Garlinghouse said he thought XRP was a currency, not a security. He compared the token to Bitcoin and Ethereum, but the SEC disagreed. If XRP is considered a security, it will likely impose further regulatory restrictions and fines.
Ripple XRP Volume
What is Ripple and XRP?
XRP is a cryptographic currency created by Ripple Labs to serve as the native currency for its payment processing platform.
Ripple boasts faster and cheaper transactions compared to traditional payment processors. Essentially, XRP attempts to compete with Bitcoin and Ethereum as a store and transfer of value, but is working to present its platform as being in the process of being adopted by traditional financial institutions.
For example, the international banking conglomerate Santander has partnered with Ripple to develop one of its payment services for international payments, but this service could easily have been developed on a variety of less centralised blockchain platforms.
Ripple currently holds 55% of the outstanding supply of XRP, following the $1.3 billion raised from sales of the coin.