- The Securities and Exchange Commission (SEC) filed a lawsuit against Ripple Labs Inc.
- Ripple raised over $1.3 billion through unregistered, ongoing cryptocurrency securities offering.
- Moreover, XRP’s price fell after news of the lawsuit came out.
The Securities and Exchange Commission (SEC) made an announcement that it filed a lawsuit against Ripple Labs Inc. for raising more than $1.3 billion. Through unregistered, ongoing cryptocurrency securities offering.
SEC Charges Ripple and Two Executives
SEC filed action also against Ripple’s CEO Bradley Garlinghouse and Co-founder Christian Larsen. The SEC’s complaint was filed in federal district court in Manhattan. Moreover, the complaint claims that Ripple raised funds in 2013 through XRP sale in unregistered securities offerings worldwide.
In case the SEC prevails, firms that continued to list the digital asset need to register as securities exchanges. As per the complaint, Ripple violated Sections 5(a) and 5(c) of the Securities Act of 1933 by failing to register XRP as security or seeking an exemption.
The filing added,
Over a years-long unregistered offering of securities (the ‘Offering’), Ripple was able to raise at least $1.38 billion by selling XRP…Ripple used this money to fund its operations…
However, XRP’s status under US securities law has been a subject of debate for several years. Moreover, Ripple Labs Inc. is an American technology firm that develops the Ripple payment protocol and exchange network.
In addition, XRP was developed by Larsen’s Ripple Labs co-founder Arthur Britto and tech Chief David Schwartz in 2012. More so, Ripple retains 55 billion XRP in escrow, releasing 1 billion every month. Unused XRP is returned to escrow.
XRP Price Crashes 24%
Furthermore, the XRP price continues to drop its price to almost -25%. This could be a bearish sign for the crypto, leading to it’s all-time low price. If this continues, the crypto price could be seen to crash as deep as $0.1, which is far down for the token to bounce back.