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What will happen to Ripple that encounters SEC "sniping"?

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On December 22, the US SEC has formally filed a lawsuit against Ripple, its CEO and co-founder.

Original title: "Will Ripple return to zero after being "sniped" by the SEC and the exchange is delisted?" "

Original Source: Planet Daily

At 9 am Beijing time today, the US Securities and Exchange Commission The (SEC) official Twitter posted that it has formally prosecuted the encryption company Ripple and its two executives - CEO Brad Garlinghouse and co-founder Chris Larsen - for "conducting an unregistered sale of securities worth $1.3 billion." , the U.S. District Court in Manhattan, New York officially accepted the case.

encounter SEC's

Ripple officially stated yesterday that it received the SEC prosecution notice on Monday , and is ready to actively respond.

Affected by the news of SEC’s prosecution, the price of Ripple’s token XRP plummeted: in the past 48 hours, XRP once dropped from 0.58 USDT It fell to 0.34 USDT, with a cumulative maximum drop of 42%.

Encountered SEC

< blockquote style="text-align: center; "> (XRP price chart for the past month)

Was ranked Can XRP, the third-largest cryptocurrency by market capitalization, survive the storm?

1. The SEC sued XRP: from verbal confrontation to court proceedings< /h3>

December 22, The Wall Street Journal reported that the US SEC plans to sue the encryption company Ripple and two executives, accusing it of violating investor protection laws by selling XRP.

The news was quickly acknowledged by Ripple. Ripple said it received notice from the SEC on Monday that the regulator plans to sue the company, CEO Brad Garlinghouse and co-founder Chris Larsen in federal civil court soon.

Then, Brad Garlinghouse posted on the official website to boost the morale of the staff. The article wrote that after reviewing the SEC's complaint today, Ripple is confident about the future and firmly believes that it is legally and historically correct.

“We have always said that there is a lack of transparency in the regulation of cryptocurrencies in the United States, and the SEC has stood by for years. The fact We've been in discussions with the SEC for almost three years on why Ripple is a currency (rather than a security) and haven't gotten a clear answer. However, we've explained that XRP is not a security. said Brad Garlinghouse.

Brad Garlinghouse also cited the reasons why XRP is not a security:

XRP is not an "investment contract". XRP holders do not share in Ripple's profits or receive dividends, and have no voting rights or other corporate rights. Buyers receive nothing from XRP purchases other than the asset. In fact, the vast majority of XRP holders have nothing to do with Ripple.
Ripple (our company) has shareholders; if you want to invest in Ripple, you don't need to buy XRP, you should Buy shares of Ripple.
Unlike securities, the market value of XRP is not correlated to Ripple's activity. Instead, the price of XRP correlates to the movement of other virtual currencies.

However, Ripple’s tough response did not cause much waves, and the SEC sued proceed as usual.

This morning, the SEC official website officially announced the prosecution of Ripple and its two executives—CEO Brad Garlinghouse, Co-founder Chris Larsen accused him of raising more than $1.3 billion through an unregistered digital asset securities offering, violating the registration provisions of the Securities Act of 1933, and seeking injunctive relief, payment of fruits, and civil penalties.

The SEC said: Ripple started selling unregistered securities to US and global investors in 2013 ( Known as the XRP digital asset) to raise funds. Ripple also distributed billions in XRP in exchange for non-cash considerations, such as labor and market-making services; in addition to organizing and promoting XRP sales used to fund the company's operations, Larsen and Garlinghouse also sold XRP to individual investors for a total of approximately $600 million.

"An issuer seeking a public offering must register the offering in compliance with the federal securities laws unless an exemption from registration applies," the SEC "We charged Ripple, Larsen, and Garlinghouse primarily because they failed to register the sale of billions of XRP to retail investors, which prevented potential purchasers from fully understanding XRP and Ripple's business, and affected The order of the public market that we have been focusing on protecting.”

Regarding the SEC’s prosecution, Ripple’s lawyer added today:< /p>

“The SEC is simply wrong both factually and legally, and we believe we will end up before a neutral fact-finder The upper hand. XRP is the third largest virtual currency with billions of dollars in daily trading volume, similar to bitcoin and ether that the SEC considers money, it is not an investment contract. The case has nothing to do with the ICO previously brought by the US SEC similarities.” Attorney Andrew Ceresney stated

“This complaint is legally false. Other major U.S. government Departments, including the Department of Justice and FinCen of the Treasury, have determined that XRP is currency. Therefore, transactions in XRP are outside the scope of federal securities laws. This is not the first time the SEC has attempted to exceed its statutory authority. Courts have tried it before Corrected, and will be corrected again." Attorneys Michael Kellogg, Kellogg, Hansen, Todd, Figel, and Frederick issued a joint statement.

Currently, the U.S. District Court in Manhattan, New York has formally accepted the case, and Odaily Planet Daily will follow up with it as soon as possible into the report.

It is worth noting that despite Ripple’s claims that XRP moves are only related to the crypto market. However, affected by the SEC prosecution, the price of XRP has plummeted in the past 48 hours, with the largest drop exceeding 41% at one point, leading the decline of the top 50 cryptocurrencies by market value.

Second, transaction It is possible to concentrate on removing XRP

Ripple is not the first encryption project to be targeted by the SEC.

The past few years, including Instant messaging software Kik Messenger, anonymous social Telegram, etc. have been suspended and prosecuted by the SEC. The first ICO prosecution can even be traced back to September 2017, when the SEC sued Maksim Zaslavskiy and two companies under his name: Diamond Reserve Club World and REcoin Group Foundation.

According to previous experience, there are two main results of the "struggle" between encryption projects and the SEC: one is the initiative and The SEC settled, registered the ICO, and paid back various fines. The second is that the court judged that the project was indeed fraudulent and fined it; in many previous prosecutions, almost all ICO companies were fined in the end, and many company founders were even permanently banned from serving as executives of listed companies and engaging in securities work, such as KIK.

Once the SEC dies, there is basically no chance of a miss. Even if the case has not yet been pronounced, it is also detrimental to Ripple in the SEC lawsuit.

From the perspective of the encryption market, many exchanges may take the initiative to delist XRP tokens in consideration of US regulation. This morning, two small exchanges, CrossTower and Beaxy, delisted XRP.

American compliance exchanges such as Coinbase, Bitstamp, Kraken, etc., are more likely to be delisted. In particular, Coinbase is currently seeking an IPO, and under the requirements of listing compliance, it is also expected to take the initiative to delist XRP.

Once Coinbase takes the lead, other leading exchanges such as Binance and Huobi may follow suit. At that time, XRP liquidity will be exhausted, forming a stampede, and the price may experience an avalanche drop. Therefore, investors must pay attention to risks.

From the perspective of the traditional market, Ripple’s old partners may suspend cooperation.

Ripple previously promoted its blockchain cross-border payment network, attracting moneygram, American Express and a series of banks from various countries partners within. Now under regulatory requirements, these partners may consider suspending cooperation. For example, Moneygram issued an article today stating, "Moneygram will continue to monitor the development of the situation. During the agreement with Ripple, Moneygram will continue to use other traditional foreign exchange counterparties."

The rain is coming, and now for Ripple, the best option may be to pay a fine to reduce further losses.

Three, support There are many opinions

Ripple has been sued by the SEC, and the encryption market has mixed reactions.

Under the SEC’s official Twitter, there are many investors complaining about Ripple:

< br>

“XRP is not a security, it is the greatest digital asset ever created, it is fast, sustainable, and The environment is favorable."
"(SEC) allows investors, especially millions of retail investors, to continue buying what you suspect is A digital asset that is an unregistered security, indeed a breach of your obligations. You should actually be suing yourself, not Ripple.”
< p>"I will definitely continue to buy XRP because it is a value investment."
…

Interestingly, Ripple's supporters seem to be retail investors and early Ripple investors. For example, the Japanese financial giant SBI Holdings President Yoshitaka Kitao, who once invested in Ripple, said, "The Japan Financial Services Agency has made it clear that XRP is not Securities. I am optimistic that Ripple will prevail in the final ruling in the US. SBI Holdings remains a firm partner for Ripple and looks forward to co-expanding in Asia.”

KOLs in the encryption market are almost on the opposite side:

“It appears that the Ripple/XRP team is regressing to new levels of unfamiliarity. They claim that for public policy reasons, namely because Bitcoin and Ethereum are “controlled by the Chinese,” their shitcoins should not be called securities. "Ethereum founder V God also mocked.

< p class="ql-long-31894886">“Today, the U.S. government came to a conclusion that we have known for 8 years. XRP is a scam. Anyone who buys it is a complete idiot, and it made a couple of founders who were trying to grab the retail business a lot of money. said Eric Conner, co-founder of EthHub.

“Ripple and XRP don’t have any ‘cryptographic’ attributes or innovations. ” Samson Mow, Chief Strategy Officer, Blockstream.