December 22, 2020 | AtoZ Markets – Ripple said today that the US Securities Exchange Commission (SEC) is preparing a “grand lawsuit” against the company for the allegedly unauthorized sale of unregistered securities. This is reported by Fortune.
Representatives of the SEC consider the issued XRP tokens as a security that has not been registered in accordance with US law, which means that it could not be admitted to the market for sale.
Ripple CEO Brad Garlinghouse and co-founder Chris Larsen will appear in the lawsuit as defendants.
Note that earlier Brad Garlinghouse announced that the new administration of President Joe Biden will be more friendly to cryptocurrencies, which will lead to the growth of the crypto market. As a result, a month after the elections, the SEC prepared to sue Ripple and its founders.
Garlinghouse was outraged by the SEC's decision.
“It's not just Grinch worthy, it's shocking. This is an attack on the entire crypto industry and American innovation, "he said.
The SEC did not respond to Fortune's request for a pending lawsuit.
In the footsteps of TON
The situation that is unfolding around Ripple is very similar to the SEC's struggle with another cryptocurrency project TON. For more than six months, Pavel Durov and his team were in litigation with the SEC, but in the end, they lost the court and were forced to stop developing the TON blockchain.
Related: Telegram Withdraws Court Battle With SEC Over TON Launch
Recall that representatives of the SEC accused the Telegram team of illegally holding an ICO and selling unlicensed securities in the form of TON tokens. In his address to investors and users, Pavel Durov wrote the following:
“I want to conclude this post with a wish of good luck to all those who strive for decentralization, balance and equality in the world. You are fighting the right battle. This battle may well be the most important battle of our generation. We hope you succeed where we failed. ”
Note that this year the SEC filed several lawsuits against cryptocurrency companies for the sale of unlicensed securities at once.
XRP price drops as SEC prepares to sue Ripple
The price of XRP did not react very well to the news. In the last 24 hours, it dropped 17.2%, one of the worst crashes in the top 100 of the largest cryptocurrencies by market cap.