No settlement in the Ripple (XRP) case after SEC complaint?
The SEC (Securities and Exchange Commission) has been dealing with alleged unlawful sales of XRP by Ripple for quite some time. Recent reports suggest that a settlement in this case is unlikely to be reached.
On 15 February 2020, both parties published a letter addressed to Federal Judge Analisa Torres at the US District Court for the Southern District of New York. According to the letter, both Ripple and the SEC had come to the conclusion that a settlement in this matter was not possible. One of the reasons for this Bitcoin Pro conclusion is that many of the talks between the two parties took place during the era of US ex-president Donald Trump. Many department heads responsible for the case have since left the SEC.
The letter addresses a December 2020 complaint against Ripple by the SEC. The SEC accused Ripple CEO Brad Garlinghouse and chairman Chris Larsen of selling XRP, an unregistered security, to investors. In 2015, Ripple raised over US$1 billion with its initial coin offering (ICO) of the XRP token. In order to sell securities even to small investors, companies need some regulatory requirements, such as writing a securities prospectus. In a press release issued at the time, Marc P. Berger, Deputy Director of the SEC’s Enforcement Division, described the matter as follows:
We allege that Ripple and its executives failed for years to comply with these core investor protection provisions, thereby depriving investors of information to which they had a right.
Despite SEC complaint: Ripple share price grows steadily
The SEC’s lawsuit seems to have little effect on the price of the cryptocurrency. Since the end of January this year, it has been skyrocketing. In the meantime, XRP is worth more than it was before the SEC’s lawsuit. At the beginning of the year, BTC-ECHO launched a poll asking the community whether the SEC’s lawsuit would mean the end for the cryptocurrency. The majority of the more than 12,000 respondents were of the opinion that this would not be the case and should be right up to the present time. How the cryptocurrency will develop after a lawsuit, which is now expected after all, remains to be seen.