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Summary
- Digital Currency entity Genesis suspend its XRP lending and trading.
- SEC launched a lawsuit against Ripple for unregistered security sales worth $1.3 billion.
- However, XRP derivatives market for Genesis shall continue trading as usual.
Considering the recent lawsuit by SEC (U.S. Securities and Exchange Commission) against the enterprise blockchain company Ripple, Genesis has suspended XRP trading.
However, XRP derivatives market for Genesis would keep on trading like before.
The CEO of Ripple, Brad Garlinghouse, had already cautioned about it on Monday, December 28.
Image Source: Shutterstock
Ripple’s unlawfully marketing of XRP (XRLS)
It was revealed that according to the lawsuit, Ripple allegedly unlawfully marketed XRP (XRPLX) to potential clients. Also, worldwide Ripple is noted as the third biggest cryptocurrency. The complaint further states that partner and former CEO Christian Larsen along with Garlinghouse used to earn money for their business by the sale of unregistered securities of XRP.
SEC’s stance on Federal Securities Law Violation
SEC has stated that it was federal securities law violation when they failed to register the sales without being eligible for any exemption for the same.
Ripple is being charged by SEC for around $1.3 billion unregistered security sale.
SEC has further alleged that there was another $600 million in personal unregistered sales by the two co-founders of Ripple. In exchange of its unlawful XRP offering, the Company used to receive services such as labour and market making.
Ripple CEO’s response to SEC allegations
In the Company’s latest blog, Ripple’s CEO Garlinghouse hand, has condemned the lawsuit, saying it was an assault on the entire cryptocurrency industry. He was further of the view that SEC was inherently wrong in the matter of law and fact.
In the month of October, Garlinghouse had expressed his intention of shifting his base to a different country if the regulations on cryptocurrencies in the U.S. were not made clear.
Ripple further told its employees that even though the current decision of the SEC might be a catalyst in helping the Company decide whether to move its HQ to a different country or remain in the US. They were also looking forward to work with the Joe Biden Government and see whether a beneficial path could be figured out.
The 71-page lawsuit explains how Ripple CEO were aware of the regulations since 2012, and how they knew XRP is a security, but did not act accordingly. Since it is a federal security law violation, the two accused cannot blame anyone else, or even claim ignorance.
