The U.S. Securities & Exchange Commission (SEC) has filed action against Ripple over allegedly conducting a $1.3 billion unregistered securities offering, Reuters reported on Tuesday (Dec. 22).
San Francisco-based Ripple is a blockchain payments company connected to the XRP cryptocurrency, which Reuters reported is the third-biggest cryptocurrency by its $23 billion market value, next to only bitcoin and Ethereum.
The SEC lawsuit also named two Ripple executives in the action, although no other details were available as of Tuesday afternoon. Ripple CEO Brad Garlinghouse, as well as Co-Founder Chris Larsen, were expected to be named as defendants, according to PYMNTS.
In response to the brewing lawsuit, Garlinghouse called it “Grinch-worthy” and “shocking” that the SEC would file such a lawsuit right before Christmas of all times. Garlinghouse said it seemed to be “an attack on the entire crypto industry and American innovation,” PYMNTS reported.
The lawsuit comes after a debate over whether XRP is a security and should be registered with the agency. Ripple has said in the past that XRP is a currency, which means it isn’t subject to the SEC’s rules.
Bitcoin and Ethereum have escaped the controversy Ripple is facing because they’ve been ruled not to be securities by way of the fact that they’re decentralized and don’t have just one owner or company.
On Tuesday as the news of the lawsuit broke, the price of XRP fell by more than 6 percent against the dollar, Yahoo Finance reported.
Ripple has been indecisive on whether it will remain in the U.S. due to displeasure with the way the country has handled crypto, but Garlinghouse has said he would hold back on making a decision to see what happens after the swearing-in of the President-elect Joe Biden after his win in November’s election. He said he wanted to see if dynamics changed and is optimistic about the chances, PYMNTS reported.
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