Ripple CEO Brad Garlinghouse said that most likely soon, a lawsuit may begin against his FINTECH company because of its cryptocurrency XRP.
The SEC decided to “go after” Ripple
After all, it might not be all that much fun for Ripple. According to Fortune, the U.S. securities and exchange Commission (SEC) may soon file a lawsuit against Ripple shortly before the holidays. Ripple’s CEO said it was “absurd” and criticized the SEC for being “wrong in terms of law and facts.”
The SEC’s plan to oppose the XRP cryptocurrency came at a time when SEC Chairman Jay Clayton announced that he would step down at the end of the year. If a lawsuit is filed against Ripple, the crucial legal work will fall to the next administration. Garlinghouse criticized that, as well as the securities and exchange Commission’s decision to sue right before the holidays. He said:
“It’s not just Grinch-worthy, it’s shocking. This is an attack on the entire crypto industry and American innovation”.
The XRP and Ripple cryptocurrency has long been under the SEC’s gun because of how it should be classified. Unlike its counterparts Bitcoin and Ethereum, XRP is scrutinized by the U.S. government on the grounds that it is considered a security and should therefore be registered as a single entity. Unlike Bitcoin and Ethereum, which are exempt from securities laws because they are decentralized cryptocurrencies without centralized management, XRP is released monthly from escrow from Ripple’s Treasury reserves, which many see as proof that the crypto asset is similar to the company’s stock..
Non-centralized business model – only problems
While Ripple has tried to make a name for itself beyond its own cryptocurrency, the fact that many of its owners and co-founders still hold XRP and can sell it is also being questioned. A large amount of cryptocurrency is still owned by Ripple, as most of it has not yet been distributed. Since its inception in 2012, 45 billion XRP has been distributed to the present day.
The FinTech firm was outraged and confirmed that the company is not allowed to use its XRP reserve funds at will, as the virtual currency is increasingly used by banks and merchants for secure cross-border transactions. In addition, XRP is exempt from escrow under a carefully planned plan.
Garlinghouse reiterated that it is difficult to view XRP as a security, and has previously indicated that the US may be the only G20 member that views XRP the way they do.
As reported by Blockchain. news, he previously said, ” If XRP were considered securities here in the United States, we have other G20 markets that hold a different view. I do not know of any market in the world that considers XRP a security.”
The constant legal pressure exerted on XRP this year by the SEC has forced Ripple to consider moving its headquarters elsewhere, even though the company has repeatedly reiterated that it is a proud American firm.