According to Fortune, the SEC will sue Ripple for selling unregistered securities in the form of the well-known XRP tokens.
In this regard, Ripple CEO Brad Garlinghouse answered with the following message on Twitter:
“The SEC has come out in favor of a cryptocurrency attack today. Chairman Jay Clayton, with his last decision, picks winners and tries to reduce innovation in the crypto industry of the US to BTC and ETH.”
Bitcoin and Ethereum have escaped harassment from the SEC due to their inherently decentralized nature. On the other hand, the XRP token essentially issued by Ripple has long been scrutinized by members of the crypto community as the most centralized asset.
This is because Ripple controls around 50 billion XRP, or about half of the total supply. Even so, CTO David Schwartz claims that they were donated by the creators of the third-largest crypto asset in terms of market capitalization.
To clarify its position, Ripple posted a document on its web page:
“By claiming that XRP distribution is an investment contract and that Bitcoin and Ether are somehow not securities, the Commission selects the winners and losers among virtual currencies, destroying the foundation for consumer innovation in the US.”
The company continues to claim that Bitcoin and Ether are both “Chinese-controlled digital currencies that the SEC has said are not securities” and proclaims that “innovation in the crypto will be entirely transferred to China” in the event of successful filing of potential SEC legal action.
According to Fortune, CEO Garlinghouse and his Ripple associate Chris Larsen should be the main defendants. Their combined fortune is estimated at $13 billion.
Even though Garlinghouse recently said that Ripple will continue to flourish even if XRP is recognized as tokenized securities, since about 90% of cryptocurrency users are outside the United States, the value of the tokens fell more than 35% to $0.27 at the time of writing this article.
