San Francisco-based blockchain payment company Ripple has been embroiled in a legal battle with the United States Securities and Exchange Commission (SEC) over the status of its cryptocurrency XRP. Despite the ongoing legal challenges, XRP has experienced a surge in the price of over 20% in the past week.
SEC’s Lawsuit Against Ripple
The SEC filed a lawsuit against Ripple in December 2020, accusing the company of selling XRP as an unregistered security worth $1.3 billion. However, Ripple denies the allegations and has been fighting the lawsuit ever since.
Positive Rulings and Slip-up by SEC
Recent court rulings have been positive for Ripple’s case. A judge ruled that the SEC cannot use one of its expert witnesses to define whether XRP is a security or not. The judge excluded the expert witness who established the rules on what is security and what is not.
In a related development, the SEC blocked the acquisition of bankrupt crypto lender Voyager by world top exchange Binance, stating that its token VGX was a security. However, the SEC failed to provide any evidence, and the judge ruled against it. Ripple is using this as evidence that the SEC lacks definitive guidelines on what is a security and what is not.
The Hinman Documents: What Is The Controversy?
Former SEC director, William Hinman, concluded in 2018 that both Bitcoin and Ethereum are commodities, not securities. However, the SEC has been trying hard not to let the documents go public, raising suspicion in the crypto community. It is speculated that the SEC is blocking this testimony from coming out as they do not want other crypto projects to utilize it and prove that their products or services are not securities.
SEC Targets SushiSwap and Voyager
The SEC has been increasingly active in the crypto space and has been targeting several companies. The latest is SushiSwap, where the SEC has subpoenaed Jared Gray, head of the decentralized autonomous organization (DAO) itself. SushiSwap had set up a defense fund of $100,000, but that may not be enough. The top regulator isn’t too fond of cryptocurrencies, and it continues to show that.
It’s hard to ignore the pattern and one is prompted to ask: Is the SEC playing favorites?
Source: https://coinpedia.org/ripple/the-ripple-sec-legal-battle-heats-up-heres-what-you-need-to-know/