Rain Blog

News and updates from the leading cryptocurrency platform in the Middle East

The latest on Ripple’s case: A potential “big win” for the industry

By Rain İçerik Ekibi - Apr 27, 7:00 PM

On December 22, 2020 - The U.S Securities and Exchange Commission (SEC) announced that it had filed an action against Ripple Lands Inc and two of its executives. The SEC alleged that the company had raised over $1.3 billion through unregistered ongoing digital asset security offering. The SEC complaint stated that Ripple co-founder Christian Larsen and current CEO Bradley Garlinghouse raised capital to finance the company’s business through the sale of XRP to finance the company’s business, where billions of XRP were distributed in exchange for non-cash consideration, labor and market-making services. Both executives, according to the complaint, also sold $600 million worth of XRP through unregistered sales - in violation of federal securities law.  The outcome of this case will have a major effect on cryptoregulation in the United States - in terms of how cryptocurrency assets are classified going forward and will shape the development of the blockchain industry.  “This case is important, not just for Ripple; it’s important for the entire crypto industry in the United States. It would really be negative for crypto in the United States,” said Garlinghouse. 

The SEC saw that XRP should be classified as a security as it was used to finance the business and therefore subject to the federal securities law. Under these regulations, and in order to protect investor interests and counteract fraud, securities must be registered with the commission and specific financial information must be publicly disclosed. Ripple has rejected those classifications from the SEC and at the time pointed to inconsistencies in applying the rules with other crypto platforms, especially Ethereum. Ripple has also stated previously that the SEC itself failed to provide legal clarity prior to this case. 

Before the SEC announcement in 2020, XRP was trading at $0.44, but a week later saw the price go down around 52% to $0.21. As time progressed the price of XRP was less affected by the case and reached around $1.83 in April 2021. Today, at the time of writing, the price of XRP is around $0.741. This is still a down alot from the company’s all-time high of $3.37 in January 2018. XRP is currently the sixth largest cryptocurrency with a market capitalization of $35.66 billion. 

THE LATEST!

April 14th saw a major breakthrough in the case and sparked talk about a “big win” for Ripple. The judge presiding over the SEC’s lawsuit denied the SEC’s motion to reconsider a set of emails and draft versions of a speech made by former SEC director William Hinman in June 2018. Non-profit organization Empowerment Oversight published internal SEC emails that seemed to contain evidence of improper conduct and conflict of interest by the SEC. Draft versions of Hinman’s 2018 speech could highlight selective enforcement of regulations by the SEC and point to conflict of interest as well. Ripple CEO Brad Garlinghouse stated “The lawsuit has gone exceedingly well, and much better than I could have hoped when it began about 15 months ago,” and that “ the wheels of justice move slowly.” These revelations could spell good news for XRP and the cryptocurrency industry as a whole, and could be a landmark win for crypto.

Rain is a Crypto-Asset Services Provider headquartered in İstanbul. Rain provides services to its users at financial institution standards.

Company

Learn

Careers

Social

Scan to download

iOS & Android

Downloads

Copyright 2022 Rain Turkey