Earlier this week, the CEO of Ripple arrived Brad Garlinghouse said the SEC plans to file charges against the San Francisco-based fintech giant. This was an unusual step as it is typical for regulators to go public first.
Ripple wasn’t sure when the SEC would announce the news. But as sure as night follows day, the SEC now has one press release on the matter with details of the nature of their complaint.
They claim that Ripple, co-founder Chris Larsen and Brad Garlinghouse raised more than $ 1.3 billion by selling an unregistered asset.
The SEC also alleges that Larsen and Garlinghouse personally benefited from unregistered XRP sales in the amount of $ 600 million.
In addition to structuring and promoting the XRP sales used to fund the company’s operations, Larsen and Garlinghouse also managed personal unregistered XRP sales totaling approximately $ 600 million. The complaint alleges that the defendants have not registered their offers and sales of XRP or have not complied with any exemption from registration, in violation of the registration provisions of federal securities laws. “
There is currently speculation on social media where Ripple comes from.
XRP takes a beating
With so much uncertainty about Ripple’s future, XRP is suffering a catastrophic mess as a result.
Analysis of the chart shows an incredible selling pressure, which has brought the price down to almost pre Spark airdrop levels. A break from the USD 0.40 support level has seen analysts expect a further decline.
Currently, XRP is priced at $ 0.34, down 25% in the last 24 hours.
Source: XRPUSDT on TradingView.com
Additionally, XRP’s market capitalization is down 54% since its peak in late November. This is enough for Tether to recapture third place CoinMarketCap.
Ripple Standing Firm to make a point
In response to the SEC’s allegations, Garlinghouse made one internal comment sent to employees. In it, he highlights various points, including a summary of the counter-arguments.
He also indicates that the SEC will launch a smear campaign against Ripple, Chris Larsen and himself.
“You should also know and expect that the SEC will probably do everything it can to paint Ripple, Chris and me in the worst possible light – quotes can be taken out of context, personal details shared, etc.”
But most intriguing of all, Garlinghouse talked about the possibility of going through the SEC. Given his belief that XRP is not a security and his confidence in winning the case, he chose to fight rather than settle.
“Chris and I had the option to settle separately. We could do that, and it would all be behind us. Does not happen. Chris and I are so sure that we are right. We will fight aggressively – and prove our cause – through this case we will have clear road rules for the industry here in the US. We are not only on the right side of the law, but also on the right side of history. “
Ripple has worked tirelessly for 8 years to build an incredible company transforming global payments. Our mission does not end! Here’s what I sent to employees yesterday + our attorneys’ response to today’s SEC filing. https://t.co/wGHW4hCW2T
– Brad Garlinghouse (@bgarlinghouse) December 23, 2020
If true, this represents a risky strategy for Ripple. But perhaps Garlinghouse thinks this is his chance to move the US crypto industry forward.
The question is, at what price will this come?