Has the price been rigged by Ripples?
Ripple: Now the defense of XRP starts - token price rises sharply
Anyone who thought that Ripple would back down in the US Securities and Exchange Commission lawsuit was wrong. The company is now publicly defending itself against the allegation that it sold XRP tokens unannounced and that these should actually be classified as securities. Ripple wants to create clarity quickly for the market, because owners of XRP have suffered "losses in the billions" since the SEC lawsuit.
The counterattack now follows about a month after the SEC (still under the Trump administration) dropped the bomb shortly before Christmas. Stu Alderoty, General Counsel at Ripple, now brings up many good reasons why Ripple is right and why XRP is not a stock of the company. In fact, US government regulators (the Department of Justice and FinCEN) determined that XRP was a virtual currency in 2015 and 2020 and have regulated it as such ever since. Basically, on its way out, the Trump administration tried to reverse the Obama administration's finding that XRP is a virtual currency, ”Alderoty said. Regulators in the UK, Singapore and Japan have also already determined that XRP is a virtual currency or a crypto asset and not a security.
After SEC lawsuit: Grayscale dissolves its XRP Trust
"Quotes taken out of context"
Thus, Ripple rejects that XRP can be treated as a share of the company. Anyone who owns XRP would have neither an investment contract with Ripple, nor voting rights, nor would they receive a share of the income or profits - i.e. they would not have any characteristics of a security. Rather, the SEC's lawsuit is “full of out of context quotes” and draws conclusions that are neither fact nor law based.
“The SEC case is unprecedented and poorly thought out. The SEC has ignored the clear status of XRP as a virtual currency and thus contradicts not only the findings of other US regulators, but also international regulatory systems. In the last eight years, the XRP market, regardless of Ripple's activities, has grown to a massive extent - trading on over 200 exchanges worldwide, ”said lawyers Andrew Ceresney, Debevoise & Plimpton, who represent Ripple. Delicate side story: Andrew Ceresney served as Director of the SEC from 2013 to 2016, so he knows the powerful agency from inside.
XRP Ledger is "completely decentralized"
The most important argument in the upcoming process will be that XRP is a crypto asset like Bitcoin (BTC) and Ethereum (ETH). That's why Ripple insists that there is “no fundamental difference between the current function of XRP and that of BTC or ETH”. XRP would be traded on hundreds of exchanges around the world completely independently of Ripple, and the XRP ledger would be "completely decentralized". And then there is a little swipe at BTC and ETH. “XRP is much more environmentally friendly than BTC and ETH, considering that there is no mining process. The energy required to mine and validate BTC transactions leaves a huge carbon footprint compared to the modest amount of energy used by XRP transactions. That has to matter from a political perspective, ”argues Alderoty.
Major investor Tetragon is suing Ripple over XRP debacle
"More environmentally friendly than BTC and ETH"
One of the sticking points of the SEC lawsuit is that XRP is not created by mining (a process that theoretically anyone with the appropriate computers and know-how can participate), but that it was created by Ripple. Because in order to then spread XRP in the world, the tokens were sold to others in deals by Ripple - and Ripple managers themselves are said to have sold XRP in large quantities.
Overall, the legal dispute is not only about $ 1.3 billion, but also about signaling other blockchain companies that have issued tokens. The messaging apps Kik and Telegram have already failed at the SEC with their own tokens, and block.one (EOS token) also had to pay a hefty fine. The matter will certainly not be cheap for Ripple.
In the meantime, XRP is also being drawn into the WallStreetBets dispute. After Dogecoin, XRP is now the next token chosen by Subreddit r / Satoshistreetbets to be pumped. The price rose sharply on the weekend and grew from around 27 to 46 cents. This means that XRP is not back where it was before the SEC lawsuit, but it is currently in a much better position than it was in the past few weeks.
Ripple: The SEC lawsuit against the crypto asset XRP is about $ 1.3 billion
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