SEC Sues Ripple And Two Executives For Sale Of XRP Cryptocurrency: A $ 1.3 Billion Securities Fraud

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The SEC said Ripple has been marketed illegally XRP (XRPLX), the third largest cryptocurrency in the world, to retail customers.

According to the complaint, Ripple’s chairman, co-founder and former CEO Christian Larsen, and the company’s current CEO Bradley Garlinghouse, raised capital for the company through the sale of XRP in an unregistered securities offering.

Failure to register the XRP sales – or qualify for a registration waiver – is a violation of federal securities laws, the SEC said.

In addition, the company also reportedly received services, including labor market and market forces, in exchange for the XRP offering. Larsen and Garlinghouse also organized personal unrecorded sales worth $ 600 million, the SEC alleged.

Garlinghouse called the case “an attack on crypto in general” in a message to employees posted on the company blog. The SEC did not want to promote innovation in digital assets, he added.

“The SEC is fundamentally wrong, both legally and factually,” Garlinghouse told CNN. “The SEC has allowed XRP to function as a currency for more than eight years, and we doubt the motivation to take this action just days before the change in administration.”

Because other branches of the U.S. government have designated XRP as its currency, it is beyond the scope of securities laws, added Ripple attorney Michael Kellogg of Kellogg, Hansen, Todd, Figel & Frederick, according to the blog post.

In October, the CEO said in a tweet the company would move its headquarters to another country if the regulatory view on cryptocurrencies in the United States were not clarified.

“While the SEC’s decision lends an even greater sense of urgency to our decision to relocate our headquarters outside of the US, we also look forward to working with Biden’s new administration to see if we have a rational approach here. path forward, ”said Garlinghouse. Ripple employees.

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