At any point of the digital transition,…
The blockchain corporation is accused of releasing the $ 1.3 billion cryptocurrency XRP in a complaint filed yesterday without mentioning it as a defense in line with U.S. laws.
Since the leading crypto currency set an all-time record last Saturday, when its price soared above $24,000, the entire world is talking about Bitcoin this week. But now there is another crypto business scandal that could “steal the show” for Bitcoin: XRP, one of the oldest currencies at the top of the crypto market, lost around 25% of its value in the last day, after Ripple, the firm that produced and issued it, was sued by the American Value Securities Regulator (SEC). The blockchain firm along with two of its executives was suspected of releasing the $ 1.3 billion crypto currency in a lawsuit filed yesterday without listing it as a defense as required by U.S. law.
Earlier on Tuesday, Ripple revealed that it was the SEC due to file a complaint against it this week – and indeed, the lawsuit was not long in coming. The organization and its CEO, Brad Gerlinghaus, and one of its founding partners, Christian Larsen, are being sued by the authorities.
“We claim that Ripple, Larsen and Gerlinghaus have failed to record the issuance and continued sale of billions of XRP to retail investors, in a way that prevented potential investors from disclosing Years, which are fundamental to our strong public market system. “We contend that Ripple, Larsen and Gerlinghaus have failed to record the issuance and ongoing sale of billions of XRPs to retail investors in a way that has prevented potential investors from disclosing years that are crucial to our strong public market system.
The XRP currency was developed and issued as a digital currency intended to be used for easy foreign payments by the creators of Ripple in 2012. In its new round of capital raising, which included Japanese financial services giant SBI Holdings, Spanish bank Santander and leading US venture capital firm Andreessen Horowitz, Ripple was estimated at $10 billion, along with Peter Thiel Investment Fund, one of the founders of Fintech giant PayPal.
XRP is no doubt the third biggest company in the market.
According to CoinMarketCap, a 25% fall in the valuation of XRP after the litigation slipped the currency to fourth position at the top of cryptocurrencies. XRP traded on crypto exchanges around the world this morning (Wednesday) at a price range of $ 0.34-0.37 – the lowest amount in the past month. This price range represents less than $17 billion of Ripple’s cryptocurrency market cap.
Bitcoin manages to lead the top of the crypto market comfortably, after the price rose again for a brief period just before $ 24,000, and later traded at a pace of around $ 23,500. Its present price represents a Bitcoin market cap of approximately $437 billion, which is equal to approximately 68 percent of the entire crypto market value, which exceeds 8,000 different currency forms. In terms of market value, Ether, the currency of the blockchain network Etherium, which is exchanged at a price of around $ 615, was second after Bitcoin, and the ‘secure’ cryptocurrency Tether, which is valued similar to the US dollar, which took the place of XRP, climbed third in the market.
As reported by Globes, in a statement released yesterday by Gerlinghaus, Ripple CEO, he argued that the SEC’s complaint against the firm and against it was “fundamentally wrong legally and factually” and expressed doubt about the timing of its filing. “XRP is a currency, and it should not be listed as an investment contract,” he said. “In fact, both the Department of Justice and the FinCEN Authority of the US Treasury have already determined in 2015 that XRP is a virtual currency, and so have regulators in other G20 countries. No country in the world has classified XRP as a security.”
The SEC has secured court wins over Telegram, Kik and Block.one in the past year, which it says broke securities laws by raising money through ICOs – an initial offering for cryptocurrencies. If the SEC’s argument that XRP is considered a defense is upheld by the court, Ripple would be forced to comply with even tougher regulations than they actually stand – and this may have a decisive effect on the activities of the company. While Ripple insists that its operations are not linked to cryptocurrencies, the company currently owns 55 billion XRP coins out of a total quota of 100 billion of these currencies and sells some of its holdings in significant quantities of the currency per fifth.