Ripple to Face SEC Suit Over XRP Cryptocurrency
Agency, whose chairman is leaving soon, claims the company violated investor-protection laws when it sold the bitcoin-like digital asset
Ripple CEO Brad Garlinghouse says the Securities and Exchange Commission is ‘wrong in matter of law and fact.’
Photo: Wei Leng Tay/Bloomberg News
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Dec. 21, 2020 8:00 pm ET
Ripple Inc. said it will defend itself against a lawsuit from the Securities and Exchange Commission that claims the company violated investor-protection laws when it sold a bitcoin-like digital asset called XRP.
The suit, which hasn’t yet been filed, would be one of the highest-profile SEC actions against a cryptocurrency pioneer, just as the regulator’s chairman is departing at the end of the Trump administration. The SEC over the past few years has brought and mostly won civil lawsuits alleging startups trampled securities laws when they raised money by selling cryptocurrencies.
None of those companies, though, was as big as Ripple and XRP. Ripple had a $10 billion valuation in its most recent funding round in 2019, and XRP is the third-largest cryptocurrency by market value.
A representative for the SEC wasn’t immediately available for comment.
Ripple said it was informed by the commission on Monday that regulators soon plan to sue the company, Chief Executive Brad Garlinghouse and co-founder Chris Larsen in federal civil court. The company and the officers say they plan to fight the claims.
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