Ripple (CCC:XRP) is taking a beating on Wednesday following news that the U.S. Securities and Exchange Commission (SEC) is suing it.

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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.