SEC sues Ripple and two executives for selling crypto XRP: $ 1.3 billion securities fraud

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SEC said Ripple illegally marketed XRP (XRPLX), the third largest cryptocurrency in the world, to retail customers.

According to the complaint, Ripple chairman, co-founder and former CEO Christian Larsen and current company CEO Bradley Garlinghouse raised capital for the company through the sale of XRP as part of a unregistered securities offering.

Failure to register sales of XRP – or qualify for a registration exemption – is a violation of federal securities law, the SEC said.

On top of that, the company has also reportedly received services, including labor and market building, in exchange for the XRP offering. Larsen and Garlinghouse also orchestrated unrecorded personal sales worth $ 600 million, the SEC alleged.

Garlinghouse called the case “an attack on crypto in general,” in a message to employees posted on the company’s blog. The SEC did not want to encourage innovation in the digital asset space, he added.

“The SEC is fundamentally wrong in law and in fact,” Garlinghouse told CNN. “The SEC has allowed XRP to function as a currency for over eight years, and we question the motivation for bringing this action just days before the change of administration.”

Since other branches of the U.S. government have designated XRP as their currency, it does not fall under securities law, added Ripple’s attorney, Michael Kellogg of Kellogg, Hansen, Todd, Figel & Frederick, according to the blog.

In October, the CEO said in a Tweeter The company would move its headquarters to another country if the regulatory perspective on cryptocurrencies in the United States was not clarified.

“While the SEC decision brings an even greater sense of urgency to our decision to move our headquarters out of the United States, we also look forward to working with the new Biden administration to see if we can find a way. rational to follow here, ”Garlinghouse said. Ripple employees.



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