Ripple said on Monday that the Securities and Exchange Commission (SEC) is planning to file a lawsuit against the company over the alleged sale of unlicensed securities, XRP. According to Ripple CEO Brad Garlinghouse, the case will also be naming him and co-founder Chris Larsen as defendants.
Garlinghouse took to Twitter on Monday to share this update and yet again continued his broken record of the authorities favoring Bitcoin and Ether to the broad crypto market.
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
“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,” said Garlinghouse.
“The SEC – out of step with other G20 countries & the rest of the US govt – should not be able to cherry-pick what innovation looks like (especially when their decision directly benefits China),” he added. “Make no mistake. We are ready to fight and win – this battle is just beginning.”
Garlinghouse characterized this decision as parting shots by Trust administration officials and predicted that the incoming Biden administration might be more favorable to the industry. Meanwhile, Ripple is preparing to litigate, he said.
“I think we have to stand up for all of crypto—and not let the SEC bully the entire industry,” Garlinghouse told Fortune, adding, “We’re going to be on the right side of history.”
An “embarrassment” to the Crypto Industry
“We know crypto and blockchain technologies aren’t going anywhere,” said Garlinghouse on Twitter and added that Ripple would continue to use XRP “because it is the best digital asset for payments – speed, cost, scalability, and energy efficiency” and it is already traded on over 200 exchanges globally.
According to him, XRP “will continue to thrive.” However, that’s not what the crypto industry feels.
“XRP isn’t a cryptocurrency; it’s not meaningfully decentralized, it’s literally a token on a DB maintained by a single entity,” and is in no way comparable to Bitcoin, said Nic carter, founder of Coin Metrics.
XRP’s claimed and “only” use case as a bridge currency for remittances has been made redundant by stablecoins because “no one wants to use a volatile, illiquid, thinly traded asset as a bridge currency,” said Carter.
Calling it a “shallow fraud” and “embarrassment” to the crypto industry, Carter believes it is time to end this madness by making Ripple accountable.
Trying to Find the Silver Lining
“XRP is a fully functional currency that offers a better alternative to bitcoin,” is what Ripple says in its Wells Submission.
Throughout 2020, Ripple’s biggest argument for XRP not being security has been Bitcoin and Ether being Chinese-controlled, which the company says will mean “innovation in the cryptocurrency industry will be fully ceded to China.”
“Looks like the Ripple/XRP team is sinking to new levels of strangeness. They’re claiming that their shitcoin should not be called a security for *public policy reasons*,” commented Ethereum co-founder Vitalik Buterin on this China control.
XRP enthusiasts are now left grasping at straws. One Twitter user pointed out how the big tech giants; Amazon, Apple, Facebook, Google, Tesla, and all the big banks have been sued by the SEC as well, “One could say it’s an interesting path to follow. Every cloud has a silver lining,” he noted.
XRP is currently the biggest loser among the top 40 cryptos, down 18% while trading at $0.463.
In response to this report, not only the social volume for XRP “exploded, but” there has also been an increase in tokens moving to exchanges, per Santiment.
If the SEC sues Ripple, it will take time to conclude as it will involve years of debate between the company and the agency on XRP’s security nature.
In the immediate future, however, the bigger question is “if centralized exchanges delist XRP while the case is pending,” said Jake Chervinsky, General Counsel at Compound Finance.
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