The U.S. Securities and Exchange Commission (SEC) is looking to file a lawsuit against blockchain payments company Ripple for selling unregistered securities relating to the sale of XRP tokens to investors in America and abroad. The company’s CEO Brad Garlinghouse has now responded to this complaint against XRP while assuring shareholders that Ripple will prove their case in court.
Per a December 22nd blog post, Garlinghouse has argued that the legal action against Ripple is a direct “assault on crypto at large.” He is confident that this move will have a “snowball effect” on the industry as a whole, affecting major players like Coinbase and all other cryptocurrencies.
“Ripple, Chris, and I may be the ones named in the filing, but this is an assault on crypto at large. In this case, XRP is a proxy for every other ‘alt-coin’ in the space. From there, you have a snowball effect; this isn’t good news for any market maker, exchanges like Coinbase, etc. This sets a terrible industry-wide precedent for any company working with a digital asset.”
The CEO went on to complain that the regulator is “engaged in an all-out attack on the crypto industry,” even though the SEC claims that it is focused on fostering innovation within the crypto space.
Garlinghouse assured that Ripple will prove their case in court, highlighting that XRP is not an “investment contract” as holders have no connection or relationship with Ripple. He emphasized that, unlike securities, the market value of XRP is not correlated with Ripple’s activities.
“We are not only on the right side of the law, but we will be on the right side of history,” Garlinghouse noted.
Ripple plans exit while XRP dumps
The CEO further added that these actions by the SEC are compelling Ripple to exit the U.S. market. Over the past few months, the company has been teasing plans about moving its operations from the United States, citing regulatory hostility, to a more Crypto-friendly jurisdiction. The company also recently opened its new Middle East and North Africa (MENA) headquarters in Dubai International Financial Center.
However, Ripple notes that it is looking forward to working with the regulators to find a solution.
The news of an upcoming SEC lawsuit has shaken off a lot of XRP holders. Ever since the news emerged, the token has dropped more than 35% and is price $0.31 at the time of writing.