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 On the afternoon of December 22 (Tuesday), the U.S. Securities and Exchange Commission (SEC) filed a blockbuster lawsuit against the digital cryptocurrency company Ripple, claiming that the company and its executives sold $1.3 billion worth of unregistered securities. The day before, the SEC filed a lawsuit against Ripple for allegedly selling unlicensed securities. The lawsuit named Ripple CEO Brad Garlinghouse and co-founder Chris Larsen as defendants. As of 15:00 on December 23, the price of Ripple-XRP was $0.37, a 24-hour drop of more than 20%, and a 50% drop from the year's high.  Why is the SEC targeting Ripple? The disagreement between Ripple and the U.S. SEC has been going on for several years. The dispute centers on whether the Ripple-related digital currency XRP is a security (similar to a stock) that must be registered with the U.S. SEC, or a currency and therefore outside the jurisdiction of the U.S. SEC? Garlinghouse expects the lawsuit to be filed before Christmas. The US SEC has ruled that Bitcoin and Ethereum are not securities but the two most valuable cryptocurrencies, in part because they are decentralized and not controlled by specific people or companies. The difference between Ripple and Bitcoin and Ethereum is that the minting process of the latter two currencies is a gradual and continuous process called mining. By comparison, Larson and others created 100 billion XRP coins at once in 2012 for a company called Ripple Labs. Although Ripple owns the lion's share of XRP, the majority of the XRP is stored and will be sold as planned distribution. Garlinghouse and Larsen also each own significant amounts of XRP. This arrangement has led some observers to believe that XRP is more like a company’s stock than a currency. Therefore, the US SEC said that Ripple is a security and that Ripple was not registered with the SEC before the launch of Ripple, which violated US law. Ripple CEO Garlinghouse believes that the U.S. SEC’s lawsuit “has fundamental errors in law and fact” and questions the timing of its filing. He said: “XRP is a currency and does not need to be registered as an investment contract. In fact, the U.S. Department of Justice and Treasury Department already recognized Ripple as a virtual currency in 2015, and other G20 (Group of 20) regulators have also done so. No other country classifies XRP as a security. ” “The SEC has allowed XRP to function as a currency for more than 8 years, and taking this action just days before a change of government has us questioning its motives. Rather than provide a clear regulatory framework for digital cryptocurrencies in the United States, SEC Chairman Jay Clayton inexplicably decided to sue Ripple, leaving the actual legal work to the next administration. ” Clayton said last month that he would resign as SEC chairman at the end of this year. This comes ahead of his term, which ends in June next year. Ripple was previously the third-largest cryptocurrency by market capitalization and currently ranks fourth, with about $12.1 billion. The signature of Ripple’s official Twitter is: Move money around the world instantly. The pinned tweet is: Got it! Together with our partners. We're making global payments faster, more reliable and more affordable than ever before.  video: https://mp.weixin.qq.com/mp/readtemplate?t=pages/video_player_tmpl&action=mpvideo&auto=0&vid=wxv_1662813251006431232 Ripple has for years vigorously argued that XRP is a security. The company explained that it does not have the right to spend its reserves at will, and that XRP has become increasingly decentralized as banks and other merchants use it as a bridge currency for cross-border transactions. According to Garlinghouse, the U.S. SEC considers XRP to be a security controlled by the company, just like oil is firmly controlled by ExxonMobil. The development of this case will have a significant impact on the booming cryptocurrency industry, and the case may eventually be resolved by a U.S. federal judge. The U.S. SEC recently successfully charged Kik, a messaging app, for issuing cryptocurrency tokens to its customers. In that case, the judge declared that the tokens involved were unlicensed securities. If the U.S. SEC also classifies Ripple as a "security," it means that Ripple may be subject to strict new rules, which will have a serious impact on the company. On this issue, Ripple has threatened to move its headquarters outside the United States, with London, Switzerland, Singapore, Japan and the United Arab Emirates as alternatives.  Notes from Brad Garlinghouse to Ripple employees This is the note I sent to Ripple employees yesterday - after reviewing the SEC lawsuit today, we remain confident that we are on the right side of the law and history. Additionally – our attorneys had this feedback on today’s filing:
Hi Ripplers, In the 5+ years I have worked at Ripple, I have seen amazing progress, innovation, and growth. This year alone, we have launched new products and features for XRP, such as Line of Credit, to provide a better payment experience for our clients and their customers. What’s interesting is that after all these years, for me, two things have never changed: 1) Our vision, the Internet of Value, and 2) XRP is a currency, not a security. Without a doubt, it is the best digital asset in the payment category. If you read on, you'll know that today, perhaps more than ever, I still believe this strongly. We have always said that there is a lack of transparency in the regulation of cryptocurrency in the United States, and the U.S. SEC has stood aside for many years. In fact, we have been discussing with the SEC for nearly three years about why XRP is a currency (rather than a security), but we have never received a clear answer. However, we have already explained that XRP is not a security because:
As you all know, we have been working hard to over-communicate, be as transparent as possible, and explain how we see the long-term value of XRP. We remain committed to working with regulators. We have actively cooperated globally, even in the United States, and have sincerely cooperated and taken action with the SEC. Even as these conversations continue to be delayed, we are ready and willing to continue the dialogue. Unfortunately, because SEC Chairman Jay Clayton is in his outgoing "broken duck" state, he has decided to make very serious allegations that Ripple, Chris Larson, and I violated the Securities Act. I expect the SEC will make this document public in the coming days, so I'd like to remind everyone to hold onto this inside information for now. You should also know and expect that the SEC may do everything in its power to paint Ripple, Chris, and me in the worst possible light - quotes taken out of context wherever possible, personal details may be shared, etc. To be clear, this is all based on their illogical claim that they believe XRP is somehow equivalent to the functionality of a stock. More importantly, let them say that XRP has always been a security, which Ripple, Chris and I all know makes absolutely no sense... especially since the U.S. Treasury Department and the U.S. Department of Justice have long concluded that XRP is a currency. Our entire AML/BSA compliance program is based on the fact that XRP is a currency! When you combine this with the fact that many other governments in the G20 refer to XRP as a currency, it is truly confusing that the SEC would pursue this lawsuit. Chris and I had the option to work things out separately. We can do this and everything will pass and nothing bad will happen. That's how confident Chris and I were that we were right. We will find clear rules of the road for the U.S. cryptocurrency industry by aggressively fighting — and proving our case — through this case. Not only are we legally correct, we are on the right side of history. Let me clarify: Ripple, Chris, and I may be the people named in the document, but this is a full-scale SEC attack on cryptocurrencies. In this case, XRP is a proxy for all other currencies in the cryptocurrency world. From here, it’s a snowball effect ； This is not good news for any market maker, exchanges like Coinbase. This sets a bad industry precedent for all companies dealing with crypto assets. With this accusation, coupled with the fact that the SEC only granted ETH and BTC a “good governance seal of approval” (which directly benefits China), they create an unfair disadvantage for companies in the United States – and greatly benefit BTC and ETH. It’s incredible that the U.S. regulator, the Securities and Exchange Commission (SEC), is picking winners in this industry (or any industry, really) and putting U.S.-based companies at a disadvantage. Interestingly, Jay Clayton has been very focused on demonstrating his support for successful innovation. He wants the public to think so, but it’s clear that the SEC is not committed to promoting innovation in the digital asset field at all. With this behavior, the SEC launched a comprehensive attack on the crypto industry. That would be Jay Clayton’s true legacy. This is very frustrating. In this new technological and economic cold war, the United States has an opportunity to become a global leader. Instead, the SEC is acting out of step with other governments, ignoring very positive macro trends and the incredible potential (and existing uses) of crypto. The crypto industry can and will thrive - but this will drive innovation out of the United States. This is ridiculous, but not surprising. “Lame Duck” The Trump administration is making important decisions that will put the Biden administration in a difficult position… which will increase the focus on consumer protection and transparency. The timing is really good. Like I said, I think these claims are wrong and defy basic logic. Regardless, I've obviously never made such an assertion before, so I say this very seriously. I hope everyone also understands the seriousness of the situation. I don't want you to worry. We will get through this and will be proven right in court. We have a very good legal team and, like I said, we have been on the right side of the law from the beginning. However, know that the legal system is slow and this will be the beginning of a lengthy civil process. No matter what twists and turns the future holds, we will support our employees, shareholders and customers. Ripple is still operating as usual – we need to stay focused and continue to deliver the value Ripple expects from hundreds of customers around the world. While the SEC's decision brings a greater sense of urgency to our decision on whether to move our headquarters out of the United States, we also look forward to working with the new Biden administration to see if we can find a reasonable path here. Nothing can change our pace. We are extremely fortunate to be able to fight this and vigorously defend our company, our teams, our products, and fundamentally, our industry as a whole. the best, brad  Pinning hopes on the Biden administration In addition to the SEC, the U.S. Treasury Department has also taken action to regulate U.S. cryptocurrencies. Last week, the U.S. Treasury Department proposed a rule that would require banks and cryptocurrency exchanges like Coinbase to verify the identity of so-called software wallets and non-custodial devices where Bitcoin and other cryptocurrencies are traded. Critics complained that the 15-day comment period for the proposed rules was too short and that the move could stifle the entire emerging industry of "decentralized finance." Garlinghouse’s view is that the new U.S. Treasury regulations and the SEC lawsuit are a final blow for Trump administration officials who are deeply hostile to cryptocurrencies. He predicts that the incoming Biden administration will be more friendly to cryptocurrencies. "I think we have to defend all cryptocurrencies and not let the SEC dominate the industry," he said. We will be on the right side of history. ”   ▼Recommended in the past       Originally produced by Ruisi Finance Can be reproduced with permission Welcome to share to  Moments Click to watch to let the voice of reason spread further |
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