SEC vs Ripple: Case Explained

cnbctv18.com:

The future of cryptocurrencies is at the mercy of one particular lawsuit filed by the US Securities and Exchange Commission (SEC) against blockchain innovator Ripple Labs Inc.The lawsuit, filed on 22 December 2020, alleges that Ripple raised over $1.3 billion through illegitimate means. The SEC complaint also holds accountable Christian Larsen, Ripple co-founder, and Bradley Garlinghouse, the current Ripple CEO, citing that they made significant gains in the process.If the SEC wins the case, XRP (the native cryptocurrency of the Ripple Blockchain) will be considered a security rather than a currency in the US.

This could, in turn, set a legal precedent that results in similar cryptos being classified as securities as well. Therefore, the case against Ripple is important for all stakeholders within the crypto space, including investors, blockchain innovators and lawmakers worldwide.Also Read| Intel unveils Bitcoin mining chipset Blockscale for more efficient rigsWhy was Ripple Labs Inc sued?Between 2013 and 2020, Ripple Labs sold XRP tokens to raise capital worth USD 1.3 billion.

When the SEC filed a lawsuit against Ripple Labs towards the end of 2020, there were no signs from the SEC’s end to indicate that Ripple was being watched. And at the time, Ripple was already trading on more than 200 exchanges.However, the SEC believed that Larsen and Garlinghouse raised capital illegally as XRP wasn’t a registered security, yet it was offered to investors across the globe.