Almost two years have passed since Ripple has faced lawsuit filings by the United States Securities and Exchange Commission (SEC). The SEC sued Ripple Labs Inc at the end of 2020 for marketing XRP tokens on its platform. The SEC stated that it comes under unregistered securities.
By the end of October 2018, more than a hundred banks were registered, and most of them started using Ripples X’s current messaging innovation. Due to security issues, they avoided the utilization of XRP cryptocurrency.
From 2013 to 2020, Ripple Labs Inc raised its capital to $1.3 billion (USD) by selling XRP tokens on the platform. In December 2020, the SEC filed a case against Ripple for selling XRP tokens.
As per the law in the US, if the court wins the case against Ripple, XRP will be considered as security rather than currency in the nation. It follows that similar cryptocurrencies will be considered as securities as well. So the hearing will be important to all digital asset shareholders, including blockchain developers and investors.
The SEC thought Larsen and Garlinghouse had started illegal trading with XRP even though the token was not registered under security. It was still offering users to buy XRP. The SEC added that Ripple profited from non-cash transactions and they pushed investors to pay in XRP to increase their token sales.
“As per the complaint registered in the file, it stated that in addition to promoting and structuring the XRP sales used to finance the company’s business, Lardsen and Garlinghouse also affected personal unregistered sales of XRP with a worth of $600 million (USD). The company alleges that defendants failed to register their offers and sales of XRP.”
If the SEC rules in favor of Rappel, it will benefit the US regulators for future new innovations in blockchain technology platforms. It will ease the regulations in the US for the development of blockchains. If the decision goes against Ripple, it will lead investors to show less interest in the development of the crypto ecosystem
Recently, Ian Balina was sued by the SEC for marketing the SPARK coins. Later, CEO Sajad Daya and Sparkster decided to pay back $35 million (USD) to the users who lost their assets by buying SPARK tokens.
Source: https://www.thecoinrepublic.com/2022/09/22/ripple-vs-sec-an-endless-battle/