Ripple Responded to SEC Allegations XRP Fall Stopped After That

Ripple Responded to SEC Allegations XRP Fall Stopped After That

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XRP has dropped more than three times from its annual highs reached at the end of November at $0.78 – after the SEC announced a lawsuit against Ripple.

The US Securities and Exchange Commission has dealt a brutal blow to Ripple’s business, demanding the return of the allegedly illegally obtained funds obtained by selling unregistered security as XRP token.

Crypto industry lawyers see the lawsuit as a bad signal. According to Jake Chervinsky:

-The US Securities and Exchange Commission is playing hardball in its assertion that Ripple illegally sold XRP as an unregistered security. Alleging violations through present day is a kill shot.

Anderson Kill lawyer Stephen Palley notes that the SEC also accuses Ripple of centrally distributing tokens from the Ripple office. Pally notes:

– This was all pretty damn centralized, distribution-wise, in the SEC’s eyes, netting Ripple and its execs more than $700 million in profit.

According to the lawyer, the SEC’s claim against Ripple is very similar to the case against the TON (Gram) project of Pavel Durov. The American authorities forced P. Durov to return $1.8 billion of investments and pay a fine of $18.5 million. After that, in May 2020, P. Durov announced the termination of work on the TON project. TON could become an ideal cryptocurrency with a throughput of about a million TPS and a ready-made user base of about 400 thousand users due to registered users of the Telegram messenger. This would allow the TON platform to replace the existing financial system. That was the main reason why the SEC destroyed TON on a far-fetched pretext. Now the American authorities are destroying Ripple in the same way. The amount of the claim is over $1.3 billion. The SEC has published a table of XRP distribution for all years, starting in 2013. It is clear from it that in the beginning XRP tokens were mainly purchased by institutionals, Ripple’s business partners. And since 2017, most of the tokens have been sold through exchanges.

In response to the SEC’s claims, Ripple’s lawyers stated:

– The SEC is completely wrong on the facts and law and we are confident we will ultimately prevail before a neutral fact-finder. XRP, the third largest virtual currency with billions of dollars in trading every day, is a currency like the SEC has deemed bitcoin and Ether, and is not an investment contract. This case bears no resemblance to the initial coin offering cases the SEC has previously brought.

The mentioned “ICO cases” are the SEC lawsuit against TON mainly. Ripple is still hoping for a fair hearing. Markets reacted positively to Ripple’s response. XRP has grown slightly after the drop.