Cryptocurrencies have been facing problems; lately, one of which is the legal issues Ripple has faced. It has been in confrontation with the US Securities and Exchange Commission. The main point that the SEC claims is that Ripple has raised capital using unregistered securities, while the latter claims that it is a coin, not security. This has created problems, and the case has remained pending since 2020.
There has been a continuing contention regarding the consideration of XRP. Its opponents believe that it is security, while its proponents say that it is a cryptocurrency according to modern standards. The court will decide what would be the results of this lasting legal battle.
Here is a brief overview of the Ripple Vs. SEC issue and how it might affect Ripple if they lose the case.
Background of Ripple and SEC issue
SEC filed a lawsuit against Ripple Labs., its CEO Brad Garlinghouse and Chris Larsen. Their main point was the illegal sale of securities to raise funds of USD 1.3 billion. The case has seen lengthened hearings as the problems have worsened. It has been one of the most sought cases because of XRP’s value which currently stands as the sixth-largest cryptocurrency on the global level. They seemed to have scored a valuable point as they presented evidence of Bitcoin and Ethereum being called currencies instead of securities.
SEC’s former director William Hinman said in a speech that Bitcoin and Ethereum are not securities. Judge Sarah Netburn refused to listen to the SEC’s request regarding protecting some documents in this case. In this case, Brad Garlinghouse has also accused SEC officials of conflict of interest. The court has asked authorities concerned to investigate this matter. If the conflict of interest is proved, it would have implications for the Securities and Exchange Commission.
Garlinghouse is optimistic about the case, but if they lose it, they are sure to quit the US for good.
Announcement regarding quitting US if SEC wins
Ripple’s CEO has continued to claim that XRP is a cryptocurrency in accordance with ISO 20022 as it supports international banking. It is one of those currencies which comply with the new standard language. The court has continued to deny motions from both sides based on certain grounds. According to legal experts, this issue is expected to be resolved in 2022. Ripple proponents are hopeful as the SEC has failed to present any proof in the court.
Mr. Garlinghouse has said in a recent interview that they intend to launch an IPO (Initial Public Offering) later this year if they win the case. They also plan to expand as they have opened an office in Toronto which will employ fifty people. It already has three hundred working employees in the United States. Also, it has the same number of employees across the globe.
As the CEO’s recent statement says that they are determined to quit the US for good, their decision won’t affect their global business. It will have lasting repercussions if the company leaves the US after this turmoil. It will work on something more than expansion as they have gained the status of a giant in the industry.
Conclusion
Crypto company Ripple plans to quit the US for good if they cannot win the case against the SEC. The prolonged lawsuit has continued for a while and has had an impact on its business. The case is expected to be resolved in 2022, so if the company leaves the US in case of an unfavorable decision, it will create a wide gap. The reason is the volume of this currency and the company’s stature on the global level.
