Ripple Lawsuit Could Invoke Billions in Losses to ‘Innocent Third-Parties,’ Says Former SEC Commissioner

The crypto community is extremely curious about what will happen to Ripple Labs and the token asset XRP after the US Securities and Exchange Commission recently filed a lawsuit against Ripple and two executives. On December 25, the major cryptocurrency exchange Bitstamp announced the removal of XRP for US customers, and a former SEC commissioner believes the lawsuit will cause billions in losses to innocent third parties.

Crypto Exchange in Luxembourg is discontinuing XRP support for US customers: “Will closely follow the evolving situation and adjust accordingly”

One of the most up-to-date conversations in the crypto arena, along with the all-time high prices, are the latest charges against Ripple Labs filed by the US Securities and Exchange Commission. The S said The regulator has “filed a lawsuit against Ripple Labs Inc. and two of its executives who are also major security holders, alleging they raised over $ 1.3 billion through an unregistered, ongoing offering of digital asset securities.” ”

Following the SEC fees, three exchanges (OSL, Crosstower, and Beaxy) decided to end XRP support alongside the Bitwise Asset Management fund. On December 25, 2020, the cryptocurrency exchange based in Luxembourg, Bitstamp, announced On January 8, 2021, XRP services would be discontinued for all US customers. In a blog post on Bitstamp it says:

In light of the recent SEC filing against Ripple Labs Inc. claiming that XRP is a security, we will cease trading and depositing XRP for our U.S. customers on January 8, 2021 at 9:00 p.m. UTC. We will closely monitor the developing situation and adjust accordingly. Our US customers can still withdraw XRP from Bitstamp. Customers from other countries are not affected.

The SEC action will cause significant harm to innocent owners

The XRP action also takes place when SEC chairman Jay Clayton decided to resign. SEC Commissioner Hester Pierce announced on Twitter that Elad Roisman has been named acting chairman of the US financial regulator. “Congratulations, Chairman Roisman,” Pierce tweeted on the 24th of December. “I look forward to your leadership of the SEC,” she added. In addition, The Block’s Frank Chaparro received a letter from Joseph Grundfest, a former US SEC commissioner.

Former US SEC Commissioner, Joseph Grundfest.

According to a letter Grundfest allegedly told Jay Clayton that the Ripple lawsuit was “unprecedented” and that there was “no urgent need to force immediate enforcement action”. “The views of an upcoming government and a congress to regulate transactions that are similar to the ones in question can differ considerably from today’s perspective,” says the Grundfest letter.

The former SEC commissioner continued:

Merely initiating the action will cause significant harm to innocent owners of XRP, regardless of the ultimate solution. After becoming aware of the procedure, intermediaries will discontinue the transactions in XRP due to the associated legal risk. The resulting reduction in liquidity leads to a loss in value of XRP.

SEC acting chairman Elad Roisman also reportedly discussed the evolving cryptocurrency markets in 2018. “The SEC needs to review and re-examine its rules, regulations and policies to ensure that they continue to function as intended to accomplish the SEC’s mission,” Roisman said at the time. “This has recently been evident in areas such as data protection and cybersecurity as well as in the emergence of new investments and technologies such as the first coin offering and the blockchain.”

What do you think of Bitstamp dropping XRP for US customers and the letter from former Commissioner Joseph Grundfest? Let us know what you think on this matter in the comments section below.

Tags in this story

BitStamp, Blockchain, Cryptocurrencies, Elad Roisman, Hester Pierce, ICO, Innocent Investors, Jay Clayton, Joseph Grundfest, Losses, Ripple Labs, Ripple Lawsuit, SEC, SEC Chairman Jay Clayton, SEC Commissioner, Securities, Third Party, US SEC , XRP, xrp lawsuit

Photo credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer of liability: This article is for informational purposes only. It is not a direct offer or an invitation to submit an offer to buy or sell, or a recommendation or approval of products, services or companies. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author are directly or indirectly responsible for any damage or loss caused or allegedly caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Stay in the Loop

Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

Latest stories

- Advertisement - spot_img

You might also like...