The US SEC accuses the blockchain firm Ripple of getting made an unregistered securities providing
© Reuters. Suitable for the special report SEC / INVESTIGATIONS
From Katanga Johnson
WASHINGTON (Reuters) – The US Securities and Exchange Commission on Tuesday hired the blockchain payment company affiliated with the cryptocurrency XRP to conduct an unregistered securities offering worth $ 1.3 billion.
The SEC also charged two San Francisco Ripple executives with personal gains they received from the offering.
Ripple created and sold XRP, the third largest cryptocurrency by market value.
Globally, financial regulators are still looking at how to regulate cryptocurrencies like and their competitors. Future court battles could determine whether cryptocurrencies can make the leap from a niche to a mainstream asset.
According to Ripple, XRP is a currency and does not need to be registered as an investment contract.
“The SEC is legally and factually fundamentally wrong,” the company said on Tuesday.
As of 2013, Ripple’s former CEO Christian Larsen and current CEO Bradley Garlinghouse raised capital through the sale of digital assets in an unregistered offering.
The company “also distributed billions of XRPs in exchange for non-cash consideration such as labor and market-making services,” the SEC said, adding that Larsen and Garlinghouse personally gained approximately $ 600 million from their unregistered XRP sales. Dollars benefited.
Larsen and Garlinghouse criticized the agency’s “lack of a clear legal framework”, adding that they would oppose the action.
“We are right and we will aggressively fight – and win – this court battle to get clear road rules for the entire industry in the US,” Garlinghouse said in a statement sent via email.
The SEC is seeking restraint, disgorgation with bias interest, and civil penalties from Ripple without specifying how much.
“Issuers wishing to take advantage of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with federal securities laws that require the registration of offers unless an exemption from registration applies,” said Stephanie , SEC Avakian enforcement director, in a statement.
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