Ripple will be sued by the SEC for allegedly selling unlicensed securities in the form of XRP tokens, according to Fortune. In a move reminiscent of Coinbases recent frontrunning of a New York Times expose of its alleged treatment of employees of color, Ripple CEO Brad Garlinghouse has taken the unusual step of posting to Twitter to seemingly legislate the issue in the court of public opinion.
Bitcoin and Ethereum have both escaped SEC enforcement due to their decentralized nature. However, XRP, the token associated with Ripple, has long been criticized by some members of the crypto community as highly centralized. Ripple has maintained an escrow account of around 50 billion XRP, or around half of the total supply, which the CTO David Schwartz claims to have been gifted by the creators of the thirdlargest cryptocurrency.
Despite classaction lawsuits and acrimonious splits between the original founders, Ripple has survived to become one of the fintech industrys richest companies, with a reserve primarily held in XRP that could theoretically be worth almost 25 billion, even after a dramatic 13.5 drop in the price of the cryptocurrency token following the news of the potential lawsuit.
A source with connections to Ripple told Cointelegraph that Theres no way it XRP is not a security.
Ripple posted a Wells submission document to its website explaining its position, claiming that By alleging that Ripples distributions of XRP are investment contracts while maintaining…