Earlier this week, Ripple CEO Brad Garlinghouse said the SEC was planning to bring charges against the San Francisco-based fintech giant. This was unusual in that it is typical for regulators to go public first.
Ripple wasn’t sure when the SEC would announce the news. But as sure as night follows day, the SEC has now issued a press release on the matter detailing the nature of its complaint.
They claim Ripple, co-founder Chris Larsen and Brad Garlinghouse raised over $ 1.3 billion from the sale of an unregistered asset.
The SEC also claims Larsen and Garlinghouse personally benefited from $ 600 million in unregistered XRP sales.
In addition to structuring and promoting the XRP sales that were used to fund the company’s business, Larsen and Garlinghouse also made in-person, unregistered XRP sales of approximately $ 600 million. The complaint alleges that the defendants failed to register their offers and sales of XRP or failed to comply with an exemption from registration in violation of the registration requirements of the Federal Securities Act. “
Social media is currently rife with speculation as to where Ripple is going from here.
With so much uncertainty about Ripple’s future, XRP is suffering from a disastrous dump as a result.
Analysis of the chart reveals incredible selling pressure that has brought the price close to the Spark airdrop. If today’s support level of $ 0.40 breaks, analysts expect another decline.
Currently, the price of XRP is $ 0.34, down 25% over the past 24 hours.
Source: XRPUSDT on TradingView.com
Additionally, XRP’s market cap has fallen 54% since its high in late November. This is enough for Tether to regain third place on CoinMarketCap.
Ripple Standing Firm to make a point
In response to the SEC allegations, Garlinghouse released an internal note to employees. In it, he makes several points, including a summary of the counter-arguments.
He also gives a hint that the SEC will launch a smear campaign against Ripple, Chris Larsen and themselves.
“You should also know and expect that the SEC is likely to do whatever it takes to paint Ripple, Chris, and me in the worst possible light – quotes could be taken out of context, personal information could be shared, etc.”
Most intriguing, however, was that Garlinghouse offered the opportunity to coordinate with the SEC. However, given his belief that XRP is not a security and his confidence to win the case, he decided to fight instead of settling down.
“Chris and I had the opportunity to settle down separately. We could do that and it would be behind us. Does not happen. That’s how confident Chris and I are that we are right. We will fight aggressively – and prove our case – through this case we will get clear rules for the industry here in the US. Not only are we on the right side of the law, but we are also on the right side of history. “
Ripple has worked tirelessly for 8 years building an incredible company that will transform global payments. Our mission doesn’t stop! This is what I sent to staff yesterday + our attorneys’ response to today’s SEC filing. https://t.co/wGHW4hCW2T
– Brad Garlinghouse (@bgarlinghouse) December 23, 2020
If so, then it is a high risk strategy for Ripple. But maybe Garlinghouse believes this is his chance to advance the U.S. crypto industry.
The question is, what price will this come at?