SEC charged Ripple with selling $1.3 billion in unregistered securities
After last week Robinhood got accused by the Securities and Exchange Commission (SEC) of misleading its clients about how it makes profit, SEC filed charges against Ripple this week.
According to the Commission, Ripple, Christian Larsen, and CEO Bradley Garlinghouse raised over $1.3 billion through an unregistered security offering. Stephanie Avakian, SEC’s Enforcement Division director stated, “We allege that Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.” Moreover, Larsen and Garlinghouse conducted personal unregistered XRP sales worth $600 million.
But according to Bradley Garlinghouse, the lawsuit was expected. He didn’t fail to add that SEC’s allegations are “fundamentally wrong as a matter of law and fact,” bringing attention to the fact that his company’s cryptocurrency, XRP is, after all, a currency, and it does not have to be registered as an investment contract.
While Ripple finds itself in a pickle, Bitcoin recently reached an all-time high as it traded at $23,400 after it surged more than 12% on December 17. Since the beginning of the year, it gained over 200%.
Following the news, XRP lost $2 billion in market value, as it traded 12% lower, according to CoinMarketCap.
Read here all about Robinhood’s charges!
Sources: forbes.com, cnbc.com