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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.