While the crypto community is enjoying the price rally of Bitcoin, the third-largest cryptocurrency XRP has dropped significantly. According to the reports, the US Securities and Exchange Commission, SEC, has sued Ripple and its two executives, CEO Brad Garlinghouse and co-founder Christian Larsen.
The lawsuit affirms that Ripple has raised unregistered securities offerings of almost $1.3 billion. During a press release, the US Securities and Exchange Commission noted, “the defendants failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws.”
In response to SEC alleges, Brad Garlinghouse said:
“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. We know crypto and blockchain technologies aren’t going anywhere. Ripple has and will continue to use XRP because it is the best digital asset for payments — speed, cost, scalability, and energy efficiency. It’s traded on 200+ exchanges globally and will continue to thrive.”
Crypto Exchanges Start Delisting of XRP
After Garlinghouse discloses the suit, the price of XRP has fallen by 41% over the past three days. Various crypto exchanges have already stopped XRP deposit and withdrawal services. Based on the reports, three small exchanges, including OSL, Beaxy, and CrossTower, have suspended XRP trading up till now. As per data from CoinMarketCap, XRP is trading at $0.32.
Some crypto experts showed concerns about the situation. Hailey Lennon, a partner at Anderson Kill, said:
“You know who is at risk if XRP is considered a security? EVERY EXCHANGE THAT LISTS XRP.”
Previously, several crypto companies received legal notices from the United States Security and Exchange Commission for allegedly conducting unlicensed securities, among them Block.One, which raised funds to develop the EOS blockchain. Similarly, in summer 2020, the regulator filed a lawsuit against Telegram, a popular messaging app, stating that the firm had carried a pre-sale of its native tokens (GRAM) and collected $1.7 billion, against the United States securities law. After losing a legal fight, Telegram decided to cease the operation behind its blockchain project and return the fund to investors.