Ripple (CCC:XRP) is taking a beating on Wednesday following news that the U.S. Securities and Exchange Commission (SEC) is suing it.
Here’s everything that investors need to know about the Ripple lawsuit.
- The SEC is going after the company for allegedly offering securities instead of a cryptocurrency.
- This has it targeting Ripple, as well as its CEO Brad Garlinghouse and co-founder Chris Larsen.
- The SEC argues that XRP should be treated in the same way that shares of a public company are.
- Ripple is arguing against this claim by stating that XRP has been identified as a currency in the past.
- It says that this shows it isn’t subject to the same regulations that a security has to meet.
- The company has been toying around with the idea of moving its headquarters overseas.
- It would do so to avoid further regulation issues in the U.S.
- XRP is a cryptocurrency in the same vein as bitcoin (CCC:BTC) or Ethereum (CCC:ETC).
- However, one major difference is that it’s sold by Ripple in segments at select periods of time.
- That’s much different than the typical mining method that other cryptocurrencies use.
- Ripple has also been looking for ways to draw in new users, such as airdrops through Flare Network.
- This also works to further decentralize the cryptocurrency and help cut out the middle man.
- The bad news for Ripple comes as cryptocurrencies gain extra attention.
- That includes bitcoin reaching all-time highs and crypto exchange Coinbase filing for an initial public offering (IPO).
XRP was down 31.9% as of Wednesday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.