XRP Crashes 29% Below $0.35 As SEC Slaps $1.3 Billion Lawsuit on Ripple

It’s a bloodbath for XRP investors as the world’s third-largest cryptocurrency tanks 29% moving below $0.35 levels. While the entire cryptocurrency market is recovering is facing a massive sell-off after the U.S. Securities and Exchange Commission (SEC) slapped a $1.3 billion lawsuit for selling XRP as unregistered securities.

This was very much expected as Ripple CEO Brad Garlinghouse has already predicted a day before that the regulator was coming after them. Garlinghouse has accessed SEC Chairman Jay Clayton saying:

“Clayton did this with one foot out the door. Rather shamefully, he has decided to sue Ripple, and leave the legal work to the next chairman. I think we have to stand up for all of crypto—and not let the SEC bully the entire industry. We’re going to be on the right side of history”.

The SEC lawsuit particularly names Ripple co-founder Chris Larsen and CEO Brad Garlinghouse. The complaint filed by the SEC alleges that:

“Ripple raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide. Ripple also allegedly distributed billions of XRP in exchange for non-cash consideration, such as labor and market-making services”.

Stephanie Avakian, Director of the SEC’s Enforcement Division noted:

“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.”

Ripple Finds Itself on A Wrong Footing

In a document published on Monday, Ripple mentioned Bitcoin (BTC) and Ethereum (ETH) are “Chinese-controlled”. This was enough to trigger the crypto community with Vitalik Buterin taking the lead and calling XRP as shitcoin. Bitcoin evangelist and entrepreneur Anthony Pompliano distance himself from his support to XRP.

Ripple continues to receive flak even from other members of the crypto community. Some are now even calling XRP as a scam.

However, in a letter to XRP investors, Brad Garlinhouse explains how Ripple has stood for innovation and emerged as a global payments company since its inception in 2013.