The US Securities and Exchange Commission is about to file a lawsuit against Ripple. According to reports, the regulator plans to argue that XRP tokens are in fact unregistered securities. The price of XRP (a cryptocurrency token created or possibly not created by Ripple Labs) fell to about 18% today after reports that the US Securities and Exchange Commission is preparing a lawsuit against the company.
According to CoinMarketCap, XRP’s transaction price was around $ 0.455 as of press time, down almost 18% of the day. Just a few hours ago, the price of the token was around $0.53.
According to a statement released today by Brad Garlinghouse, CEO of Ripple, he wants the SEC to sue the company for selling unlicensed securities. At that point, XRP’s market value was approximately $23 billion and has since fallen to $20.7 billion.
“Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH,” wrote Garlinghouse, adding, “The SEC out of step with other G20 countries and the rest of the US govt should not be able to cherry-pick what innovation looks like (especially when their decision directly benefits China).”
He concluded that Ripple was “ready to fight” and that “this fight has only just begun.”
SEC to sue Ripple due to nature of it’s token
According to reports, the main problem with the SEC’s use of XRP is the nature of the token itself. Although regulators previously stated that cryptocurrencies like Bitcoin or Ethereum are not securities, they haven’t ruled out the rest of the market.
In the past, regulators have carried out several high-profile token projects under this premise. In April, the SEC’s lawsuit eventually accused the Telegram Open Network of ruling $1.7 billion in token sales as illegal, derailing the Telegram Open Network. In October, the Kin cryptocurrency project was a little more fortunate and “only” fined it $5 million. However, the ongoing litigation itself can be more destructive.