The SEC lawsuit against Ripple has created a domino effect for the crypto company as well as the XRP token. SEC is suing Ripple and two of its executives including current CEO Brad Garlinghouse for $1.3 billion in sales in unregistered Security. The court filing by the SEC suggests that it considers XRP security rather than an asset class as claimed by Ripple all along.
XRP token managed to rise above the key barrier of $0.30 by the end of November and climbed as high as $0.90 on Coinbase, but it has lost most of those gains and a significant portion of it since yesterday after Ripple revealed it might get sued by the SEC. However, XRP’s price crash might be the least of Ripple’s concern at the moment, as the company might lose many of its key partners and investors owing to the lawsuit.
XRP is the backbone of Ripple’s banking technology but many crypto platforms especially those who are offering their service to the United States customers might have to part ways with the fourth-largest token. Bruce Fenton, CEO of Chainstone labs warned crypto exchanges that keeping XRP on their platforms would invite the wrath of SEC for offering Security without a license.
Here’s some more info from the SEC https://t.co/pDFwY38LDp
— Bruce Fenton (@brucefenton) December 23, 2020
XRP Delisted From Two Crypto Platforms, Bitwise liquidate it’s XRP Funds More to Follow?
Two crypto platforms have already delisted XRP tokens and all services involving XRP post the news of the SEC lawsuit broke out. The first one was the Fidelity-backed Hong-Kong exchange OSL that terminated all XRP trading and payment services this morning followed by Chicago-based Beaxy Exchange which also suspended all XRP trading services until further notice.
The SEC has charged @Ripple with conducting an unregistered security sale.
— Beaxy Exchange (@BeaxyExchange) December 22, 2020
Bitwise, one of the leading fund managers has joined the growing list of companies parting its way from XRP token as the company just announced the liquidation of XRP funds for its Bitwise 10 Crypto Index Fund. The fund manager mentioned,
The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws. Bitwise’s decision to liquidate its position in XRP was based on consideration of new public information from the SEC’s complaint.
The SEC lawsuit against Ripple information from the SEC’s complaint. not out of the blue as many in the past has pointed towards the flawed projection of XRP as a non-security. Ripple is already fighting several lawsuits for security claims while maintaining throughout that they only manage the market supply of XRP and are not the creator of the crypto token.
Ripple claims of XRP not being Security seems hard to stand in the court of law as its website page claims the company aims to profit from the token. Ripple also holds 25% of the total supply to fund its operations. These facts about XRP available on the main website of Ripple Labs fits the exact definition of security.