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The Ripple executives view these XRP-related issues with the SEC as an attack on the entire cryptocurrency ecosystem.
Ripple Labs Inc has been very much famous in the last couple of months with its legal struggle with the US Securities and Exchange Commission (SEC) which affected the price of XRP that is that very token in question. According to a recent report, Ripple Labs made an earlier attempt to settle the issues with the SEC before it came to the public domain.
As much as the SEC successfully won the case against Telegram Group Inc and Kik Interractive Inc over sales of unregulated securities, there is another history of having settled a similar case with the Block.one without further problems.
Brad Garlinghouse, the CEO of Ripple Labs sought to address some key questions on the Twitter thread, of which he disclosed their early engagement with SEC.
I’m not going to litigate the SEC’s unproven allegations on Twitter, and as you can imagine, there are new considerations to what can / should be said publicly after the litigation process starts. However, I would like to address 5 key questions I’ve seen. 1/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
“Can’t get into specifics, but know we tried – and will continue to try [with] the new administration – to resolve this, ” he said.
Though the earlier settlement did not go as expected, they seek to win the heart of the masses as they consistently decry the charges filed by the SEC pending the initial hearing later this month. In response to the complaint filed by SEC, Garlinghouse went ahead to respond that the company ensured that some customers who were mostly the early movers were provided with incentives to access the “On-Demand Liquidity Products”.
Garlinghouse was asked whether Ripple Labs paid exchanges to list XRP. In response, he stated that the company has no control over where XRP is listed, though not enough explanation was given on this question. Currently, most of the exchanges including Coinbase have suspended the trading and deposit of XRP on its platform ahead of the legal proceedings. The others that have not made any decision on it yet are still monitoring the situation for a possible change of position.
In 2019, the SEC raised a concern about the sale of unregulated securities against Block.one, the company behind EOS. However, they were able to settle this after the company agreed to pay a fine in the settlement, giving EOS the regulatory approval to be traded on exchanges.
Why Ripple Labs Has Issues with the SEC
After stating to qualify Bitcoin and Ethereum as currencies, the SEC attempted to reply to the question about the currency status of XRP by dragging the company behind the token, Ripple, to court for selling illegal securities worth $1.3 billion since 2013. According to the charge, the raised funds were used to fund their operation.
Ripple Lab has in possession a lion’s share of the total XRPs premined, and are released periodically into the market. This makes their operation different from most of the mineable cryptocurrencies. Ripple in response condemned the assertion, claiming they do not go into the reserves anytime they please.
The Ripple executives see this as an attack on the entire cryptocurrency ecosystem as the outgoing US president was very hostile to their operations. Garlinghouse has promised to the XRP community that they will defend and ensure that everything falls back into place.