The big guys in the currency circle often want to be the first. However, no one wants to be the first, but Ripple is firmly in the first place. This throne is the first Ripple (Ripple Company) to be brought to court by the SEC as a securities. How the court will rule in the Ripple case will have a great impact on whether the subsequent "definition" of cryptocurrency is a security. This lawsuit has always attracted much attention.
Historical Review: SEC Charges Ripple with Violating Registration Provisions of the Securities Act of 1933
According to a public press release on the official website of the U.S. Securities and Exchange Commission (SEC), on December 22, 2020, the SEC officially filed a lawsuit against Ripple and two executives, Ripple’s co-founder Christian Larsen and the company’s current CEO Bradley Garlinghouse, for issuing and raising US$1.3 billion in unregistered securities. "Securities" filed a lawsuit.
The indictment alleges that Ripple began issuing XRP digital assets in 2013 by selling unregistered securities to U.S. and global investors in exchange for non-cash equivalent tokens such as labor market compensation and market-making services. According to the complaint, in addition to financing XRP sales, Larsen and Garlinghouse also conducted individual unregistered XRP sales totaling approximately $600 million. The complaint alleges that defendants violated the registration provisions of the federal securities laws by failing to register their XRP contract and registration exemption.
The SEC filed a lawsuit in federal district court in Manhattan alleging that the defendants violated the registration provisions of the Securities Act of 1933 and seeking injunctive relief, disgorgement of prejudgment interest, and civil penalties.
In this regard, Ripple has always emphasized that "we are not securities, we are not", while the SEC has consistently said "you are securities, you are". Let's keep looking.
The SEC is clinging to Ripple, and there is a huge gap in consensus between the two parties on fines.
The SEC wants to impose a fine of $102 million on Ripple, which is much less than the nearly $2 billion fine originally sought by the court. However, Ripple proposed that the fine should not exceed $10 million, citing the settlement of the Terraform Labs case as a reason. The SEC countered that such a low penalty "fails to satisfy the purposes of the civil penalty statute."
(RippleLabs criticized the SEC’s fine of 2 billion mg as too much, citing the Terraform settlement case: a fine of 10 million is just right)
The SEC sent a letter to District Court Judge Analisa Torres on June 14, explaining: “Before asking the court to consider the trial of this case on par with the settlement of the Terraform Labs case, it is noted that Ripple does not appear to have filed for bankruptcy as the defendant. And cease business forever.” The SEC further explained that Terraform Labs agreed to burn the keys of all crypto asset “securities”, repay “securities” investors a large amount of money, and remove the two board members responsible for violating regulations.
In contrast, the SEC emphasized that Ripple did not agree to any repayments to investors—in fact, Ripple agreed to nothing.
The simple explanation in plain language is that even if the victim gets back the investment amount, the punishment for Ripple is not enough, and the "fine" will not be given to the SEC.
Solution and way out: Ripple cooperates with RWA digital asset custody company outside the United States
Ripple is enjoying success in the United States and is actively turning to overseas development outside the United States. Ripple partners with Archax asset exchange to import hundreds of millions of dollars in RWA (real world assets) to the XRP ledger.
According to an official press release on June 13, 2024, Ripple and Archax, the UK’s first compliant and regulated asset exchange, broker and custodian, have partnered to move millions of dollars in RWA to the XRP Ledger (XRPL). The agreement was signed in 2022, the year Archax partnered with custody company Metaco to provide digital asset custody services to customers. Metaco was acquired by Ripple in mid-2023.
Graham Rodford, CEO of Archax, said: “In use cases such as RWA tokenization, there are clear real-world benefits for operational efficiency, access to liquid markets and the transparency inherent in cryptocurrencies. Archax has already integrated equities, debt instruments and money market funds, etc. Tokenization of assets. Financial institutions are now understanding this and we are excited to play our role in helping them embrace this technology by bringing their assets to XRPL.”
This article The tug-of-war between XRP court offense and defense continues to stalemate with the pursuit of new RWA developments outside the United States. First appeared on Chain News ABMedia.
