The US higher financial body, Securities and Exchange Commission (SEC), sued the Ripple exchange platform, which created the XRP cryptocurrency. The US organization accuses the owners of Ripple of manipulations concerning XRP while also insists that the token should be categorized as security but not a currency. Login Casino follows the latest cryptocurrency news and explains the reasons and possible outcomes of the lawsuit.
Along with the cryptocurrency boom and new records for Bitcoin, other digital assets were mainly growing in the last weeks. Even though some downfalls are an inevitable part of the process, the XRP token seems to have more troubles, at least for the nearest weeks or even months.
The US upper financial regulator in the world of securities and exchange, SEC, presented the lawsuit against Ripple. The latter is the exchange platform that uses fiat money, virtual assets, cryptocurrencies, and other types of securities. In 2013, it created a 'personal' crypto token called XRP, which exists only inside the Ripple platform.
The primary reasons for further litigation are the manipulation of XRP value and its nature as cryptocurrency. Thus, the SEC believes that the regarded token should be considered as securities, so Ripple has had to register it appropriately. It means that the exchange platform broke the rule and was trading unregistered securities.
Along with this definition of misconduct, the SEC accuses the owners of Ripple, Brad Garlinghouse and Chris Larsen. The governmental structure says they were promoting XRP and promising its wide usage as valuable currency, while it was not.
What can be the continuation of this lawsuit?
Although the suit from SEC automatically means problems, there are plenty of arguments to fight back the reputation of XRP. This token has been on the market for almost eight years and has already been approved by the US FinCen Justice and Treasury Departments as cryptocurrency. It means that other digital assets now can be in danger if the SEC can win the lawsuit.
Also, it looks strange that the SEC was ignoring Ripple's case for such a long period. Some experts link this attack with the upcoming leaving of Jay Clayton from the SEC's CEO position next year. Actually, the possible recategorizing of XRP into the security can make owners of this currency the Ripple shareholders.
Being the fourth most capitalized cryptocurrency on the market after Bitcoin, Ethereum, and Tether, XRP has more than $15B in market capitalization. Its recent value is about $0.35 per token, with the top position during the last week on about $0.65 level.