SEC to press charges against Ripple over its token’s security position
The Securities and Exchange Commission (SEC) based in the US has been reported to be getting ready to press charges against Ripple. The charges are based on the firm’s continuing sales of the XRP token.
Will not go down without a fight.
CEO of Ripple, Brad Garlinghouse, has taken to Twitter to provide more titbits on the case. He said that the SEC had gone to the ballot as of that day and made a vote to strike crypto. He went further to accuse SEC chairman, Jay Clayton, of making moves that will monopolize Bitcoin and Ethereum in the US. Brad claims this is limiting crypto industry innovation in the country.
Ripple CEO also said that Clayton is choosing sides as his last move as he will be stepping down from his position come the end of 2020.
Garlinghouse, however, despite the ongoing charges, has said that Ripple will not be deterred in the use of the XRP token. On the lawsuit, he said that his firm is well and ready to take on SEC toe to toe and is sure of a win for Ripple.
More information on the lawsuit has been left confidential beyond what was shared by Garlinghouse over Twitter. Ripple has withheld releasing an official report on this case. Garlinghouse has established the truth in this information to Fortune, a site amongst the first to publish these reports. The suing party, SEC, however, has remained silent not commenting on the issue.
Confidence of XRP being a security
The basis of the lawsuit by SEC against the blockchain company, same as many more, is if the XRP token is a security and its sale a security offering. There is a high probability that the XRP token is security as it satisfies the Howey Test; security is any venture asset with yield proportionate to promotion.
This lawsuit is not a first for SEC as it has taken to court other crypto firms such as Block.one (EOS) and Sia. These firms paid a fine but did not have to answer to accusations from SEC.
However, what makes Ripple stand out is that it did not have an initial coin contribution. By mid-2019, Ripple had accumulated more than $1 billion in its ongoing sales, and its token sales are currently ongoing. Ripple’s ongoing sales might, however, complicate issues.
A win regardless for Ripple
Ripple had previously faced class-action suits against its security position from private firms. SEC lawsuit, was a first, though, for Ripple. However the result comes, Ripple will not cease its operations. A rule against Ripple could be positive as it will boost confidence in investors.
Keywords
Ripple
SEC
Lawsuit
Security