- Ripple is expecting to be sued by the SEC, according to CEO Brad Garlinghouse
- The Ripple SEC lawsuit will be based on suggestions that the company has sold unlicensed securities in the form of its XRP token
- Ripple is already facing private lawsuits on the same basis
Ripple CEO Brad Garlinghouse has said that he is expecting the company to be sued by the U.S. Securities and Exchange Commission (SEC) in the near future. According to Garlinghouse the company expects to be accused of selling unlicensed securities in the form of its XRP token by the SEC, the same accusations made against it in ongoing private lawsuits from aggrieved investors. Garlinghouse told Fortune that the case was a “parting shot” by outgoing SEC chair Jay Clayton and that they would fight it.
Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH. (1/3) https://t.co/r9bgT9Pcuu
— Brad Garlinghouse (@bgarlinghouse) December 22, 2020
Ripple SEC Lawsuit “Attack on the Entire Crypto Industry”
Garlinghouse took the unusual step of publicly pre-empting a Ripple SEC lawsuit, telling Fortune that the incoming lawsuit was “an attack on the entire crypto industry and American innovation” criticizing Clayton for taking the action “with one foot out the door” and for leaving the leg work to his replacement.
The Ripple SEC lawsuit will likely take the same broad format as the existing securities lawsuits regarding Ripple, in that the XRP token should be considered a security rather than a currency, commodity, or asset.
Unlike Bitcoin and Ethereum, which Garlinghouse oddly suggested were centralized in China, XRP tokens are not mined in a decentralized manner over time but were all created in one go in 2012 by Garlinghouse and Chris Larsen. Bitcoin and Ethereum have been ruled as non-securities due to their creation method and ongoing token distribution methods.
Conversely, Ripple holds the vast majority of XRP tokens in trust and sells them into the market at regular intervals, while at the same time sending regular payments to former CTO Jeb McCaleb who typically sells them immediately, much to the amusement of Ripple critics.
Private XRP Security Cases Ongoing
The ongoing Ripple securities lawsuits have claimed that the company’s success and value is inextricably linked to the value of the XRP, and so Ripple has an incentive to promote its token and talk up the price potential. Ripple and Garlinghouse deny this, with the latter vowing to fight any Ripple SEC Lawsuit and “not let the SEC bully the entire industry”, despite the fact that many in the industry don’t consider XRP to be a true cryptocurrency anyway.
“It’s an attack on the entire crypto industry and American innovation”
oh yeah right, like crypto was before by all means in favour of XRP dumping each month millions of dollars for yrs. Now once trouble came, it’s “together we stand”
It’s only Ripple vs SEC, not entire market.
— Krisma (@KRMA_0) December 22, 2020