The year 2020 ends in a week and the crypto community can only look forward to Bitcoin consolidating its price at its all-time high of over $ 23,000. The surge will have hurt the other digital tokens, but the third largest currency by market value, issued by Ripple, collapsed on Wednesday.
XRP is down over 40%, wiping out all of the last month’s performance in hours. The ripple recovered its price of $ 0.22 after trading at $ 0.40 again yesterday and $ 0.50 on December 17th. The reasons do not concern Bitcoin: on the contrary, they separate Ripple from the other major cryptocurrencies.
The SEC (Securities and Exchanges Commission), which deals with financial markets and regulates IPOs, has criticized Ripple’s reason and the behavior of its founders. The catchphrase: XRP was not issued for the purpose of introducing a currency and is now presented as a security or investment contract for the simple purpose of speculative investment.
This prompted the market cop to investigate the « illicit delivery of securities » and gave Ripple, which centralizes the tokens, an opportunity to raise $ 1.38 billion without any regulation. The company and its two co-founders Christian Larsen and Bradley Garlinghouse are affected in the complaint. According to The Verge, both personally own a large part of the tokens in the billions.
Ripple was quick to respond to the SEC’s decision. Its CEO Bradley Garlinghouse replied to one of his Twitter proponents, “It could mean [a lot] for America’s largest crypto industry. The SEC does the opposite of « promoting innovation » in the United States. It’s not just XRP they’re attacking here. «
Still on their side, Ripple members have decided to put a finger on the SEC, accusing them of making the weather nice for China, the chief miner of Bitcoin, and which therefore owns a large chunk of it. Garlinghouse concluded that the allegations were « totally false about the facts and the law » and that the company was « convinced » that they would « win him over in front of a neutral investigator ». « »
However, his words will betray remarks Ripple made to the New York State Department of Financial Services in 2016 about the nature of XRP as a financial security or currency. According to the company that recognized it, individuals “bought XRP for speculative purposes”.