Ripple is being sued by the US Securities and Exchange Commission for allegedly selling unlicensed securities in the form of XRP tokens, according to capital.
In a move reminiscent of the recent New York Times headline on Coinbase for alleged treatment of color workers, Ripple’s CEO Brad Garlinghouse has taken the unusual step of posting on Twitter in an attempt to apparently resolve the issue before the Public Opinion Court.
Today the Securities and Exchanges Commission decided to attack cryptocurrencies. President Jay Clayton picks winners in his final act and seeks to curtail US innovation in the cryptocurrency industry for BTC and ETH. https://t.co/r9bgT9Pcuu
– Brad Garlinghouse (@bgarlinghouse) December 22, 2020
Both Bitcoin (BTC) and Ether (ETH) have evaded SEC regulation due to their decentralized nature. However, XRP, the token associated with Ripple, has long been criticized by some members of the crypto community for being highly centralized.. Ripple has an escrow account of roughly 50 billion XRP, or about half of the total offering that the company’s Chief Technical Officer, David Schwartz, declares that they have been “given away” from its creators.
Despite class actions and bitter divisions among the original founders, Ripple has survived to become one of the richest companies in the high-tech industry.with a reserve, mostly in XRP, that could theoretically be worth nearly $ 25 billion, even after a sharp 13.5% drop in cryptocurrency prices following news of the possible lawsuit.
A source with ties to Ripple told Cointelegraph:
“There is no possibility [XRP] be of no value. “
Ripple has published a Wells presentation document on its website explaining its position: “By claiming that Ripple’s XRP distributions are investment contracts and Bitcoin and Ether are not securities, the commission is selecting the winners and losers of virtual currencies, destroying innovation-driven innovation. US and consumer friendly”.
The company continued to claim, without evidence, that Bitcoin and Ether are “two China-controlled virtual currencies that the SEC has declared are not securities”.and that “innovations in the cryptocurrency industry will be completely ceded to China” if the potential lawsuit filed by the SEC is successful.
According to Fortune Both Garlinghouse and co-founder Chris Larsen, whose net worth is estimated at $ 13 billion, are expected to be named as defendants in the potential lawsuit..
Although Garlinghouse has stated that Ripple would continue to thrive even with a denomination of value for XRP, The company recently stated that it was looking for new headquarters outside of the US, claiming that lack of clarity of regulations forced it to do so.
Cointelegraph reached out to Ripple for comment on whether Larsen and Garlinghouse would stay in the US amid the potential lawsuit and has received no response as of press time.