- Joseph Grundfest questions why SEC filed a lawsuit against Ripple.
- Grundfest explains that the lawsuit is unnecessary.
According to John Deaton, a crypto lawyer, he claimed Joseph Grundfest warned the SEC that investors risk losing billions considering “the magnitude of an SEC enforcement action” against Ripple’s XRP.
The former SEC chairman reportedly wrote a letter to Jay Clayton before the Ripple lawsuit was filed questioning the motive.
Its been all crisis for Ripple since the firm locked horns with the SEC. Clarity on if XRP is a security or an asset led to the Ripple lawsuit filed by Jay Clayton’s SEC.
The Ripple lawsuit has resulted in XRP being suspended on several exchanges, a serious dip in the price of the coin/security, and a sell-off by many investors.
Why Ripple lawsuit is unnecessary
According to an anonymous Ripple spokesperson, he described Grundfest as an unpaid advisor for the firm.
Grundfest described the suit as unprecedented, given the upcoming change in power among the SEC’s top ranks and presidential administration.
The former SEC chairman said the objectives of a new administration and congress could differ substantially from current perspectives rendering the lawsuit ‘unnecessary’.
He also argued that the enforcement action could harm holders of XRP, who he called innocent third-parties.
Ripple after SEC lawsuit
XRP price started to plunge since the day SEC filed a lawsuit against the blockchain firm. The lawsuit alleged that Ripple engaged in an illegal ICO and sold XRP token without registering it as security with the SEC.
However, Ripple has claimed that XRP is not a security. The SEC named Ripple’s current CEO Brad Garlinghouse and co-founder Chris Larsen in the lawsuit. Ripple is determined to fight the lawsuit and is working towards fighting the financial regulator’s legal battle.