Securities and Exchange Commission is the United States Securities and Exchange Commission, referred to as SEC. Their main function is to formulate and maintain securities laws and rules to prevent market manipulation. Similar to our Securities Regulatory Commission.
But Ripple, as a blockchain giant, XRP is a cryptocurrency. There are so many cryptocurrencies on the market. Why does the US SEC always keep an eye on it, causing Ripple's XRP to languish?
This starts with the 1946 U.S. Supreme Court decision defining investment contracts: “If an investor purchases virtual currency to fund a company or project and intends to profit from these efforts, the virtual currency may fall within the purview of the SEC. scope."
In fact, in addition to suing XRP, the US SEC also investigated#BTCand #ETH, which were known as the three giants of blockchain cryptocurrencies at the time, but ultimately determined that BTC and ETH were not securities.
What BTC and ETH have in common is that they both use POW algorithm consensus mechanisms. The biggest difference between them and XRP is that the tokens of BTC and ETH are generated by Mint enthusiasts and do not generate direct benefits for any company or project group. .
Therefore, the US Securities Regulatory Commission (SEC) collected evidence and sued Ripple in December 2020, conducting illegal securities issuance and sales worth US$1.3 billion through the sale of#XRPtokens.
This has attracted widespread attention from cryptocurrency enthusiasts around the world. Is cryptocurrency a security? Is it subject to supervision by the Securities Regulatory Commission? It has always been controversial, so the final judgment of this case will have a major impact on the development of the entire cryptocurrency circle.
Until July 13, 2023, District Judge Analisa Torres of the Southern District of New York ruled that Ripple's programmatic blind sale of XRP through the exchange did not meet the definition of an investment contract in the securities law and was not considered a security.
At this point, the minds of the majority of cryptocurrency enthusiasts were temporarily settled, and then the news that the US SEC approved the Bitcoin spot ETF also came out, and most cryptocurrencies began to gradually forget about the legal battle between Ripple and the US SEC.
Until March 1, 2024, District Judge Analisa Torres of the Southern District of New York approved a request by the U.S. Securities and Exchange Commission (SEC) to extend the deadline for submissions to end the lawsuit against Ripple Labs. Only then did everyone realize that their lawsuit had not yet come to an end.
Because the ruling, in addition to the U.S. SEC’s ruling on charges that Ripple sold $757 million in XRP through the exchange, was not considered an unregistered securities sale. There is also an extremely negative accusation against Ripple, which has raised $728 million through investment contracts from institutional investors. The judge ruled that Ripple’s actions violated Section 5 of the U.S. Securities and Exchange Act, and the XRP sold in this case was considered a security.
According to court documents on March 1, the last date for Ripple to submit objection materials has been extended to April 22, and the U.S. SEC needs to submit a response by May 6. It may then be possible to get a final verdict on Ripple. But even if this lawsuit is ultimately unfavorable to Ripple, it is only a sanction against Ripple.
The XRP purchased by XRP enthusiasts in the cryptocurrency circle through exchanges will not be too affected. The biggest market risk may be the impact of the emotional panic of XRP holders for unknown reasons.
The Ripple community did not sit still. In December 2023, the developers of the Ripple community took action and released the first XRPS token with a total amount of 10 billion based on the XRC20 protocol on the Ripple chain in the form of inscription casting. All tokens were The coin is generated like BTC and ETH, and is generated by cryptocurrency enthusiasts Mint. No direct benefit will be generated for any company or project group.
In this way, while avoiding the risk of market impact, it also improves the index standard of the Ripple chain through XRPS, is committed to using a unified index standard to create inscriptions and NFT markets on the Ripple chain, and improves the DEX attributes of Ripple through AMM technology.
As blockchain technology continues to advance and the cryptocurrency ecosystem gradually improves, there will continue to be friction between regulation and innovation. Ripple is still in the regulatory storm, but XRP and even the entire Ripple chain have been able to grow independently, and #XRPS will also achieve glory!
