U S SEC charges blockchain company Ripple for conducting an unregistered securities offering reuters.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from reuters.com Daily Mail and Mail on Sunday newspapers.
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In a significant move, the US Securities and Exchange Commission (SEC) has sued both the founder and current CEO of tech company Ripple for raising more than $1.3 billion through an unregistered securities offering after selling their cryptocurrency called XRP, which is touted as the third-largest cryptocurrency by market value.
The lawsuit which said that XRP is a security not currency, claimed that Ripple s former CEO and founder Christian Larsen and its current CEO Bradley Garlinghouse violated securities laws by selling XRP over a seven-year period starting in 2013.
According to the suit, the illegal securities offering created an information asymmetry that let Ripple sell XRP to investors who only knew what Larsen and Garlinghouse chose to tell them, The Verge reported on Tuesday.
Cryptocurrency XRP Drops Again in Wake of SEC Ripple Lawsuit
XRP plunges further after the SEC sues Ripple Labs, alleging the blockchain company sold more than $1 billion of XRP tokens without registering with the agency.
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Dec 23, 2020
The price of cryptocurrency XRP plunged again on Wednesday after the Securities and Exchange Commission filed a lawsuit alleging that Ripple Labs, a blockchain company that supports the digital currency, sold more than $1 billion of XRP virtual tokens without registering with the agency.
XRP was down more than 30% at less than 34 cents on Wednesday, according to data from cryptocurrency market site CoinDesk. The virtual currency fell as much as 17% on Tuesday after Ripple proactively announced the expected legal action and said it would fight it.
Illustration by Alex Castro
Ripple, its former CEO and founder Christian Larsen, and its current CEO Bradley Garlinghouse are being sued by the US Securities and Exchange Commission. The SEC says that they raised more than $1.3 billion through an unregistered securities offering.
The suit claims that Ripple violated securities laws by selling XRP, which
The Wall Street Journal calls “the third-largest cryptocurrency by market value,” over a seven-year period starting in 2013. According to the complaint, the “illegal securities offering” created an information asymmetry that let Larsen and Garlinghouse sell XRP to investors who only knew what Larsen and Garlinghouse chose to tell them.
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The U.S. Securities and Exchange Commission today filed a lawsuit against Ripple Labs Inc. and two of its executives claiming that the company, which offers the XRP cryptocurrency, illegally sold unregistered securities.
The complaint alleges that Ripple, along with Christian Larson, the company’s co-founder and executive chairman of its board and former chief executive officer, and Bradley Garlinghouse, the company’s current CEO, raised capital to finance the company’s business beginning in 2013 through the sale of unregistered securities called XRP to investors in the U.S. and worldwide.
The SEC says Ripple distributed billions of XRP in exchange for noncash considerations such as labor and market-making services, which is the key to the complaint. The offering of cryptocurrency is not in itself illegal when the purpose is to provide a digital currency for trading, but the line is crossed when funds from a cryptocurrency are used primarily for company purposes. In th