The US Securities and Exchange Commission, according to Brad Garlinghouse, CEO of Ripple, will bring a lawsuit against Ripple over the XRP cryptocurrency, which it regards as collateral. He insists that XRP is not a security, citing the SEC’s lawsuit as an attack on the cryptocurrency inconsistent with the G20 countries and the rest of the US government.
SEC calls lawsuit against Ripple Over XRP, CEO calls it an attack on Crypto
According to reports, the SEC is due to file a lawsuit against Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen over the sale of the XRP cryptocurrency. Ripple said it received a notice from the regulator on Monday alleging it violated the laws governing the sale of unregistered securities when it was selling XRP to investors. The news drove the price of XRP down sharply, falling about 15% early Tuesday morning.
Garlinghouse expected the lawsuit to be filed in the next few days, and tweeted on Monday:
Today the SEC decided to attack crypto. Chairman Jay Clayton picks the winners in his final act and seeks to limit US innovation in the crypto industry to BTC and ETH.
Garlinghouse insists that XRP, like Bitcoin, is not a security, calling the SEC’s lawsuit “fundamentally false for legal and factual reasons.” The SEC chairman Jay Clayton is stepping down at the end of the year.
Ripple argues that XRP is not a security, questions the SEC’s timing for the lawsuit
Garlinghouse argued that “XRP is a currency and does not need to be registered as an investment contract.” He noted that “The Justice Department and the Treasury Department established as early as 2015 that XRP was a virtual currency, and that other G20 regulators did the same. No other country has classified XRP as a security. “
Yoshitaka Kitao, president of SBI Holdings, a Ripple partner, noted that the Financial Service Agency (FSA) in Japan “has already made it clear that XRP is not a security,” adding that he is “optimistic that Ripple will become.” in the EU will prevail final decision in the US “
Claiming that the SEC “is not keeping up with other G20 countries and the rest of the US government” and the agency “shouldn’t be able to figure out what innovation looks like,” Garlinghouse stated:
Ripple has and will continue to use XRP … Make no mistake, we are ready to fight and to win – this fight is just beginning.
The CEO questioned the SEC’s motive and timing of the lawsuit. “The SEC has approved XRP as a currency for over eight years, and we are questioning the motivation to file this lawsuit just days before the change in administration,” he began. “Instead of creating a clear legal framework for crypto in the US, (SEC chairman) Jay Clayton inexplicably decided to sue Ripple – and leave the actual legal work to the next government.”
US crypto rules have led Ripple to consider moving its headquarters to a more crypto-friendly jurisdiction such as London, Switzerland, Singapore, Japan or the United Arab Emirates.
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