The US Security and Exchange Commission (SEC) will sue Ripple for allegedly selling unlicensed securities, a new report by Fortune argues.
The development was confirmed by Ripple CEO Brad Garlinghouse, who decided to voice the issue publicly and garner support for Ripple.
“Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH,” Garlinghouse wrote.
This is not the first time a cryptocurrency has been in trouble, but so far Bitcoin and Ether have mostly escaped SEC's ire owing to their decentralized nature.
However, certain assets developed by Ripple have long resembled a centralized model, making them sufficiently interesting for SEC to investigate.
One issue is the fact that Ripple maintains an account worth 50 billion XRP, or nearly half the supply, leading to centralization. This comes at a time when Ripple has faced a lot of inner strife with developers falling out and throwing lawsuits at one another.
Nevertheless, Ripple has survived and some say, even thrived. According to Cointelegraph, who cited a source, the stipulation that Ripple is a security is not tenable in court. Basically, Ripple's case is that by targeting Ripple as a security and saying that Bitcoin and Ethereum are not securities, SEC is trying to pick “virtual currencies winners and losers.”
Based on Fortune's information, Garlinghouse and co-founder Chris Larsen may be called to the defendant stand should SEC proceed with full-blown legal recourse. This begs the question if the pair will remain in the US or choose to move offshore to be safer.
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