Summary of the XRP case with the US SEC, impact on the crypto industry

If you've been following the news in the cryptocurrency industry recently, Everyone should have seen the news aboutRipple, the creator of XRP, has filed a lawsuit against the US Securities and Exchange Commission. This event is considered one of the most protracted events and has had a huge impact on the crypto industry.

If you can't keep up with the news Or still don't understand what happened? This article will help summarize what happened between XRP and the SEC along with the possible impacts.

know Ripple, creator of the XRP coin

Ripple Labs was founded in 2012, but the company initially went by the name OpenCoin and later created the coin XRP. Fast and low fee country

which when XRP There were only a handful of cryptocurrencies starting to enter the market, and XRP emerged as an attractive and timely option for transferring money across countries. For this reason, XRP can grow quickly From a market capitalization of tens of millions of dollars to a billion dollars in 2017, it became the coin with the highest market capitalization. of the world since then

The US SEC filed a lawsuit. Ripple

In December 2020, the US SEC filed suit against two senior Ripple officials, Brad Garlinghouse and Christian Larsen, alleging that Ripple offered unauthorized securities and raised funds. Earned more than $2 billion in 1.3. The securities that the SEC accused in this case are XRP coins.

If referring to US securities law Normally, when any company offers securities for sale, it is necessary to submit documents to register securities with the US SEC in order to receive consideration and approval first. However, if looking at the working mechanism of RippleNet and XRP, it can be seen that XRP serves Facilitates the movement of money across countries only through RippleNet.

After nearly three years of court battles between Ripple Labs and the SEC, on July 3, 13, a US court ruled that XRP cannot be considered a security if offered for sale to general investors through exchanges. (Exchange), but will be considered securities if offered for sale to institutional investors.

However, on August 9, 2023, the SEC filed an appeal requesting a reconsideration of the case. Therefore, we still have to follow the news whether the court will allow the appeal or not. But it has been reported that three of the original SEC's attorneys have resigned, and there are signs that a hearing will take place in the second quarter of 3.

Impacts on the Crypto Market

From the court's decision that XRP is not considered a security if offered for sale to general investors through an exchange. But they are considered securities if they are offered for sale to institutional investors. Analysts think that Both sides win half the battle, with the SEC retaining authority to regulate securities offerings to institutional investors, while Ripple and other exchanges Can still open trades XRP as a digital currency is available to general investors.

Although it appears from the latest news that Ripple is gaining the upper hand with the SEC in this lawsuit, it remains to be seen what the final outcome will be.

In the event that XRP is determined to be a security, it is highly likely that developers of other cryptocurrencies will In particular, coins that were previously offered to investors through an ICO (Initial Coin Offering) may be sued as securities, as in the case of XRP, which may cause the value of these coins to drop severely. Or at worst, Removal from the trading board

conclude

Ripple Labs, the company that created the coin XRP is being sued by the US SEC for being an unauthorized securities offering. The security here is XRP, which has resulted in a court battle since 2020. On July 13, 2023, the court ruled that XRP is not considered a security if offered for sale to general investors through an exchange. But they are considered securities if they are offered for sale to institutional investors. Even though the market thinks that Ripple is gaining the upper hand. But we still have to wait and see the conclusion. The trial is expected to take place in the second quarter of 2.