Ripple Lawsuit Could Invoke Billions in Losses to ‘Innocent Third-Parties,’ Says Former SEC Commissioner

Spread the love

The crypto community is extremely curious about what will happen to Ripple Labs and the token asset XRP, after the U.S. Securities and Exchange Commission (SEC) recently filed a lawsuit against Ripple and two executives. On December 25, the large cryptocurrency exchange Bitstamp announced delisting XRP for U.S. customers, and a former SEC Commissioner thinks the lawsuit will invoke multi-billion losses to innocent third parties.

Luxembourg Crypto Exchange Drops XRP Support for US Customers: ‘Will Closely Follow the Unfolding Situation and Adapt Accordingly’

One of the most topical conversations in the crypto space, besides the all-time high prices, is the recent charges against Ripple Labs that were filed by the U.S. Securities and Exchange Commission (SEC). The SEC said that the regulator “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”

Following the SEC charges, three exchanges (OSL, Crosstower, and Beaxy) decided to drop XRP support, alongside the fund Bitwise Asset Management. On December 25, 2020, the cryptocurrency exchange based in Luxembourg, Bitstamp, announced it would be halting XRP services for all U.S. customers on January 8, 2021. In a blog post about the subject Bitstamp said:

In light of the recent SEC filing against Ripple Labs Inc., which alleges that XRP is a security, we are going to halt all trading and deposits of XRP for our US customers on 8 January 2021 at 9 PM UTC. We will closely follow the unfolding situation and continue to adapt accordingly. Our U.S. customers will still be able to withdraw XRP from Bitstamp. Customers from other countries are not affected.

SEC Action Will Impose Substantial Harm on Innocent Holders

The XRP action is also happening as SEC Chairman Jay Clayton decided to give his resignation. The SEC Commissioner, Hester Pierce, announced on Twitter that Elad Roisman has been appointed the acting Chair of the U.S. financial regulator. “Congratulations, Chairman Roisman,” Pierce tweeted on December 24. “I look forward to your leadership of the SEC,” she added. Moreover, The Block’s Frank Chaparro obtained a letter from Joseph Grundfest, a former Commissioner of the U.S. SEC.

RECOMMENDED READ:  DeFi adoption on the rise AAVE hit record high of $520
Former Commissioner of the U.S. SEC, Joseph Grundfest.

According to a letter to Jay Clayton, Grundfest allegedly said that the Ripple lawsuit was “unprecedented” and there’s “no pressing reason compels immediate enforcement action.” “The views of a soon-incoming Administration and Congress as to the regulation of transactions similar to those at issue can differ substantially from current perspectives,” the Grundfest letter details.

The former SEC Commissioner further wrote:

Simply initiating the action will impose substantial harm on innocent holders of XRP, regardless of the ultimate resolution. Upon learning of the proceeding, intermediaries will cease transacting in XRP because of the associated legal risk. The resulting reduction in liquidity will cause XRP’s value to decline.

The SEC’s acting Chair Elad Roisman also reportedly discussed the evolving cryptocurrency markets back in 2018. “The SEC must examine and re-examine its rules, regulations, and guidelines to ensure that they are still working as intended to accomplish the SEC’s mission,” Roisman said at the time. “This is most recently manifested in areas such as data protection and cybersecurity, as well as the emergence of new investments and technologies such as initial coin offerings and blockchain.”

 386 Interactions,  6 today

READ ALSO:
Bitcoin Price Movement Analysis for 11th April, 2021

Is Bitcoin nearing its peak? It's unlikely. Many on-chain measurements revealed that, although Bitcoin was highly bullish, it had not Read more

Fidelity’s Tom Jessop on why Crypto has reached a “tipping point.”

The crypto market has gained traction as a result of low interest rates and fiscal stimulus, according to a Fidelity Read more

How arrests for attempting to obtain a hitman and a nuclear bomb demonstrate that the dark web is not always anonymous.

Paying with cryptocurrency does not guarantee your safety. Most of the criticisms levelled at cryptocurrencies is that its difficult-to-trace existence Read more

Bitcoin, BTT, Dogecoin Price Movement Analysis for 7th April, 2021

Bitcoin was expected to remain above the $55,800-support, a level that coincided with its 200-SMA. BitTorrent Token was projected to Read more

Why crypto analyst Ben Armstrong says, ‘He Very Confident Bitcoin Will Reach $300K This Year.’

Recently, blockchain expert and influencer Ben Armstrong mentioned Bitcoin in a video posted to his highly popular YouTube channel “BitBoy Read more

Binance Coin, Dogecoin, SushiSwap Price Movement Analysis for 4th April, 2021

Binance Coin predicted that fresher record thresholds will be set in the coming days due to solid technicals. Following a Read more

Tron Price Movement Analysis for 4th April, 2021

In the cryptocurrency industry, excessive uncertainty has had a long-term effect on the price of the digital commodity. This uncertainty Read more

Ethereum Price Movement Analysis for 4th April, 2021

Ethereum, the second-largest cryptocurrency, has entered a volatile zone, which could drive the digital asset's price even higher. In the Read more

Chainlink, DigiByte, Enjin Coin Price Movement Analysis for 4th April, 2021

Bitcoin faced some selling pressure just above the $59k mark, leading it to slip to $56,600. The majority of the Read more

Bitcoin fell by more than 4%, causing many other cryptocurrencies to plummet drastically.

The world's most expensive cryptocurrency fell 4.1 percent, bringing several other coins down with it, sending the economy into the Read more

Leave a Reply

Contact Us