- Ripple announced the US SEC could file a lawsuit against the firm’s native token
- The federal judge could only resolve the dispute of XRP
- The unusual announcement from the fintech firm could have a political component
Ripple is one of the largest fintech firms in the world and a vital player in the crypto market. On Monday, the firm announced that the United States Securities and Exchange Commission seems to file a lawsuit against Ripple. The SEC will bomb the file over the purported sale of unlicensed securities, or the so-called native token of the firm XRP.
What can happen if the SEC sues Ripple over XRP?
Observing the current scenario if the US Securities and Exchanges Commission files the lawsuit against Ripple, the action might take years to resolve the dispute. The matter of a dispute is whether the native token of the fintech firm, XRP, is security like other shares of stock that is registered with the regulatory agency, or a currency beyond the purview of the US SEC. Behind the fight between currency and securities, currently according to CoinMarketCap, XRP is the third most valuable crypto token with more than $21 billion market capitalization.
Ripple’s CEO has predicted the incoming administration
Observing the announcement of Ripple, it seems like Brad Garlinghouse, the chief executive officer of the firm, has predicted the upcoming administration. According to Garlinghouse, the incoming Biden administration might be friendlier to the crypto industry than the Trump administration. However, there is a possibility that the recent unusual announcement of Ripple can also have a political component.
Is XRP security as a share of stock or a currency?
The US SEC has declared the two leading and most famous cryptocurrencies as they are not securities, which also cleared that the two tokens are decentralized and no one controls them. In the case of XRP, as Larsen and others have created 100 billion units of the token in one fell swoop and not mined the currency, it is different from Bitcoin. Indeed the fintech firm has pushed back aggressively for several years on the notion that its native token is a security. As several banks and other institutions use the decentralized XRP to fill the cross-border transactions gap, the firm notes that it does not have the discretion to tap the reserve funds as it wishes.
However, now the dispute could only be resolved by the federal judge, which also could have implications on the cryptosphere. According to several critics, the current regulatory proposed rules in the US could stifle the emerging crypto and DeFi sector.
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?