SEC’s Attack Over Cryptos In The United States
The Securities and Exchange Commission (SEC) of the United States alleged the world’s third-biggest cryptocurrency Ripple for unregistered security sales. The whole world sees it as an attack by the SEC over the cryptocurrency market.
Is it an attack over the whole cryptocurrency market? Or something is wrong with Ripple only? What do you think is right? Well, for your information, the SEC has filed a complaint against Ripple (XRP) saying that Ripple has sold unregistered securities.
With this complaint, there is a war started among Ripple and SEC. But, the SEC has filed a complaint only. The SEC hasn’t given any brief about this complaint in front of the media. So the whole world is waiting for the quote from SEC’s side.
But Ripple management is angry over this complaint filed against them. The management claims that the SEC is completely wrong. But what is the reality? It is the first time that a cryptocurrency based company is targeted by the SEC of the US.
SEC & Cryptos Relation
Otherwise, the SEC is responsible for the regulations of securities. The SEC has nothing to do with the cryptocurrency. But, it monitors and tracks various fintech companies. But After this lawsuit against the world's third-largest digital currency XRP, the whole world is talking about it.
This topic has become the global topic for the fintech companies, traders, investors and even retail buyers of Ripple (XRP).
But we will find out the reality. What is the reality behind this controversy? And who is on the right side? Let's see in detail where this controversy started and where it is now. Also, we will find out whether it is a dispute between Ripple and SEC only or it is an attack on the whole cryptocurrency market.
This controversy started on the 22nd of December last year. The Securities and Exchange Commission (SEC) of the United States raised a lawsuit against the third most traded cryptocurrency Ripple.
In its complaint, SEC mentioned that Ripple has sold securities without any registration. It also claimed that securities were sold and marketed in the wrong way. SEC claimed a lawsuit of more than 1 billion US-dollars.
SEC claimed that Ripple raised such a big amount of funds without registering the securities. Its management should have registered the securities before they were offered and sold to the retail buyers.
Violation of Federal Security Laws
In the past few years, Ripple is growing very fast. Ripple has raised around 1.3 billion United States Dollars with the IPO. A lot of retail investors have switched to Ripple from Bitcoin or Ethereum. We all know that Bitcoin is the most traded cryptocurrency and it is still at the top.
At the second position, we see the biggest altcoin known as Ethereum. And when we talk about the third position, then Ripple is in the third position.
That is why the whole world is talking about the case filed against Ripple by The Securities and Exchange Commission (SEC) of the United States.
Allegations On CEO & Former CEO
SEC has alleged Ripple’s CEO and former CEO for selling XRP in an illegal way to raise capital for the company. In its complaint against Ripple, SEC said that the Ripple CEO Bradley Garlinghouse and former CEO have raised funds in an illegal way.
They sold the unregistered securities in their public offering, which is against the federal security laws. That is why the SEC has filed a complaint against the company.
What does the CEO say?
You have heard about the SEC’s side and you must be aware of the Ripple’s side. What Ripple’s CEO and former CEO says about this lawsuit? Ripple has posted on its website that the SEC is trying to attack the whole cryptocurrency market.
Also, CEO Brad Garlinghouse has told Coindesk in an interview that the SEC has filed a wrong complaint against them. He said that registration is required for securities, but XRP or Ripple is not a security.
The whole world knows that XRP is a digital currency. And digital currencies like XRP are not required to be registered with any securities exchange.
Why Chinese Vs. US Topic Discussed?
Now the question is that the Chinese Vs. US Fintech companies topic came form? Yes, it is related to the SEC’s attack over cryptocurrencies. As per his interview, CEO Brad Garlinghouse has told Coindesk that it is an attack on American innovation.
Many US legislators are already trying to encourage Chinese innovations over American innovations. Saying that CEO Brad Garlinghouse is trying to get sympathy from the country and all of the American fintech companies of the cryptocurrency market.
Impact Of Lawsuit On XRP
All of the retail investors want to know whether this lawsuit impacted the XRP or not. Then the answer is yes, it impacted the XRP in a very effective way.
If you are also a retail investor of XRP or you are willing to invest in this cryptocurrency. Then it is must to know how this currency is being impacted by the lawsuit filed by the SEC of the US.
Following are some of the major impacts that have been seen in less than a month on Ripple and its market. These impacts are important to know for everyone who is linked up with XRP.
Ripple was growing rapidly for the last 6 years. That is why it became the third most traded virtual currency in the world after Bitcoins and Ethereum. In 2020, due to coronavirus all of the digital assets performed well and Ripple (XRP) was one of these digital assets.
In November 2020, Ripple was also growing and being purchased by so many retail investors out there from different parts of the world. That is why Ripple gained a good amount as a capital fund for itself.
But after the SEC’s attack, Ripple’s price was dropped a lot. Almost 60% of the drop was seen in Ripple’s price.
After the news came out about the SEC’s attack on Ripple. The whole market changed completely for the Ripple. Ripple has seen a price drop and it lost the faith of investors also.
Those who were planning to invest in Ripple stopped immediately and delayed their investment plans. Still, new investors are waiting for this dispute to be solved. Because they don't want to invest in a currency which is facing a dispute with any government authority.
We can’t say that Ripple is going into loss. After a drop, it again started going up gradually. But still, there is a doubt of its heavy loss. Investors are in doubt due to a lawsuit raised by the SEC.
What if Ripple fails to prove that it is right and SEC’s claim is wrong? Then what will happen to the Ripple network? Such kinds of doubts are increasing the chances of loss in the future for Ripple.
The Securities and Exchange Commission (SEC) of the United States is not attacking the whole cryptocurrency community. So there is no need to fear the SEC’s lawsuit against Ripple.
But, if you are related to the Ripple then you must have to look at this matter with more concern. Because it is linked with the particular digital asset in which you have invested.
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