Cryptocurrency XRP fell over 17% to about 46 cents on news that the Securities and Exchange Commission (SEC) will sue Ripple, according to CNBC. SEC claims that Ripple violated laws against selling unregistered securities when it sold XRP to investors.
- Ripple CEO Brad Garlinghouse said the SEC’s suit was “fundamentally wrong as a matter of law and fact” and questioned its timing.
- Garlinghouse argues that “XRP is a currency, and does not have to be registered as an investment contract.”
- The U.S. Justice Department and the Treasury’s FinCEN determined that XRP is a virtual currency in 2015, and other G20 regulators have done the same. – Garlinghouse.
- Ripple CEO expects SEC lawsuit to be filed before Christmas leaving gaps in the digital currency’s legal framework.
- XRP has a market cap of more than $20 billion, making it one of the world’s most valuable cryptocurrencies.
- Ripple owns 55 billion of the total 100 billion XRP tokens despite claiming to be independent of the cryptocurrency.
- The “security” label of XRP matters since it could bring the cryptocurrency under strict new rules and impact Ripple.
- Ripple has threatened to move its headquarters outside the U.S., with London, Switzerland, Singapore, Japan, and UAE as potential destinations.
- The fresh scrutiny against Ripple comes after the Treasury Department proposed a new bitcoin disclosure rule to close money-laundering regulatory gaps.
XRP is currently declining. XRPUSD is down 4.96%