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The US SEC may sue Ripple and its executives for violating investor protection laws

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The lawsuit has not yet been formally filed, and the current SEC chairman is leaving after the end of the Trump administration.

Rhythm BlockBeats news, according to the Wall Street Journal report on December 21, the US SEC will file a lawsuit against the cryptocurrency company Ripple Inc. for violating investor protection laws because of its launch of the cryptocurrency XRP. Ripple Inc. said it will defend itself against a lawsuit brought by the Securities and Exchange Commission, or sec.

The lawsuit has not yet been formally filed, and the current SEC chairman is set to leave at the end of the Trump administration. Over the past few years, the SEC has filed, and mostly won, civil lawsuits accusing several startups of violating securities laws when they raised money by selling cryptocurrencies. None of these companies are as big as Ripple Inc., though. Ripple was valued at $10 billion in its latest funding round in 2019, while XRP is the third-largest cryptocurrency by market capitalization.

Ripple said it received notice from the SEC committee on Monday that the regulator plans to sue the company in federal civil court soon. Company, CEO Brad Garlinghouse and co-founder Chris Larsen. But the company and executives said they planned to dispute that claim.

“They were wrong both legally and factually,” Garlinghous said.

The lawsuit revolves around whether the company's 2012 digital asset, XRP, should be listed in the SEC. register. Registration involves disclosing a company's business model, risks, and financials to the SEC and the public. The SEC reviews disclosures and provides feedback to investors to improve disclosures.

It is not clear what the SEC is seeking in the lawsuit, although typically in similar cases the SEC would Require the sued company to pay a fine, and require digital asset sponsors to disclose information to investors continuously-just like listed companies regularly disclose information.