The SEC is likely on the eve of filing a lawsuit against Ripple alleging that XRP is a security a move that is causing pain in the altcoin industry
Ripple sounds like it is about to be sued by the SEC, a move which has long been rumored and always possible, but now sounds like is actually happening.
The news comes as the CEO of Ripple, Brad Garlinghouse announced that the SEC would bring the lawsuit in the very near future.
And as you can imagine, Garlinghouse is not happy, saying...
"It’s not just Grinch-worthy, it’s shocking.It’s an attack on the entire crypto industry and American innovation.”
Following that up with:
“XRP is a currency, and does not have to be registered as an investment contract. In fact, the Justice Department and the Treasury’s FinCEN already determined that XRP is a virtual currency in 2015 and other G20 regulators have done the same. No other country has classified XRP as a security.”
“The SEC has permitted XRP to function as a currency for over eight years, and we question the motivation for bringing this action just days before the change in administration. Instead of providing a clear regulatory framework for crypto in the U.S., (SEC Chairman) Jay Clayton inexplicably decided to sue Ripple — leaving the actual legal work to the next Administration.”
Predictably, XRP is dropping significantly over the last 24 hours, dropping roughly 20%.
Altcoins likely to suffer as well...
In my opinion this is part of the reason altcoins have been so weak the last couple days.
Sure, we had a drop in bitcoin but altcoins got hit much harder.
I think the fear there is that if XRP is labeled a security and sued by the SEC there is probably a long list of others that could be as well.
Some altcoin investors fearing that their favorite coin could be next are moving to tether/btc/cash in order to de-risk.
In the long run, this may be a big nothing burger as perhaps Ripple could move overseas or they may be able to settle with a small fine, similar to what EOS and Blockone did.
However, it may cause weakness in the near term for altcoin investors.
This coming at a time when we could all use a big fat alsteason...
Stay informed my friends.
Image source:
-Doc