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December 23, 2020
On Tuesday the Securities Exchange Commission (SEC) filed a complaint in the Southern District of New York against blockchain company Ripple Labs, Inc., its CEO Bradley Garlinghouse, and its co-founder, chairman of the board, and former CEO Christian A. Larsen for purportedly raising more than $1.3 billion through its unregistered digital securities offerings.
According to the complaint, since at least 2013 the defendants have “sold over 14.6 billion units of digital asset security called ‘XRP,’ in return for cash or other consideration worth over $1.38 billion U.S. Dollars, to fund Ripple’s operations and enrich Larsen and Garlinghouse.” The SEC averred that the defendants engaged in this conduct without registering their offering and sales of XRP with the SEC as required by law.
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US regulator charges Ripple over its XRP asset, saying it s a $1.3 billion unregistered offering, not a cryptocurrency
US regulator charges Ripple over its XRP asset, saying it s a $1.3 billion unregistered offering, not a cryptocurrency
Kevin ShalveyDec 23, 2020, 16:21 IST
The Ripple logo is seen at the SIBOS banking and financial conference.Chris Helgren/Reuters
Blockchain company
Ripple has been running a $1.3 billion unregistered offering, akin to an unlicensed stock sale, according to a complaint filed Tuesday by the US
Securities and Exchange Commission. Issuers seeking the benefits of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with the federal securities laws that require registration of offerings unless an exemption from registration applies, said Stephanie Avakian,
The complaint, which names Ripple CEO
Bradley Garlinghouse and former CEO and co-founder
Christian Larsen, alleges the company’s XRP token constituted an unregistered securities offering, and that the two engaged in insider trading worth $1.3 billion.
“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,” Stephanie Avakian, director of the SEC’s Enforcement Division, said in a statement.
According to the complaint, Garlinghouse falsely told traders that he was “very long” in the currency meaning he was not selling it even as he Larsen “personally profited by approximately $600 million” from their trades.
US says 3rd-largest cryptocurrency is a security, not currency daijiworld.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from daijiworld.com Daily Mail and Mail on Sunday newspapers.
By Aaron Nicodemus2020-12-23T17:51:00+00:00
The chief compliance officer at Ripple Labs allegedly warned company leaders on multiple occasions that its marketing of its cryptocurrency offering, XRP, could lead the Securities and Exchange Commission (SEC) to classify it as a security.
The CCO is said to have advised company leaders Ripple should carefully reconsider how it marketed XRP to investors, the public, and its own employees so as to avoid having to comply with federal securities laws, which would require Ripple to open its finances to public scrutiny.
Company leaders brushed those warnings aside, according to a lawsuit filed by the SEC on Tuesday in U.S. District Court for the Southern District of New York. The SEC alleged Ripple Labs illegally raised $1.3 billion by selling 14.6 billion units of XRP since 2013 without registering the cryptocurrency as a security, as required by the agency. Ripple Labs, a San Francisco-based company doing business as Open Coin, maintained