The value of XRP, the third largest cryptocurrency in the world after Bitcoin and Ethereum, plummeted by more than 40% after the US Securities and Exchange Commission (SEC) sued both the founder and current CEO of the tech company. Ripple for raising more than $ 1.3 billion through an “unregistered stock offering” after selling their XRP cryptocurrency.
According to CoinMarketCap, XRP has fallen by more than 42% in the past 24 hours and is down by more than 63% from its 30-day high of $ 0.76.
Now it stands at just $ 0.27.
The lawsuit claiming that XRO is a stock not a currency, claimed that former Ripple CEO and founder Christian Larsen and his current CEO Bradley Garlinghouse violated securities laws by selling XRP for a seven-year period to starting from 2013.
According to the company, “The SEC is completely wrong on the facts and the law, and we are confident that we will eventually succeed in the face of a neutral whistleblower.”
“XRP, the third largest virtual currency with billions of dollars in trading every day, is a currency as the SEC deemed Bitcoin and Ether and is not an investment contract,” Ripple said in a blog post.
The company said the other major branches of the U.S. government, including the Department of Justice and the Treasury Department’s FinCen, have already determined that XRP is a currency.
“Transactions in XRP therefore fall outside the scope of federal securities laws. This isn’t the first time the SEC has tried to go beyond its legal authority. The courts have corrected it before and will do it again. ” Michael Kellogg, Kellogg, Hansen, Todd, Figel and Frederick
Garlinghouse said that “while the SEC’s decision brings an even greater sense of urgency to our decision to move our headquarters outside the United States, we look forward to working with the new Biden administration to see if we can find a path. rational to follow here “.
The SEC had previously established that Bitcoin and Ethereum are currencies.
XRP, however, differs from Bitcoin and Ethereum in that the rest of the two cryptocurrencies are created through an ongoing “mining” process.
“Ripple started XRP by creating 100 billion units all at once” and this may be why the US SEC called it a stock, not a currency.
Ripple was recently valued at $ 10 billion after a $ 200 million funding round.
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