XRP is down as much as 13 percent, hitting its lowest level in nearly a week.
XRP, the world’s third largest cryptocurrency, fell after Ripple Labs Inc. It is facing a lawsuit from the US Securities and Exchange Commission over its token.
The company’s chief executive, Brad Garlinghouse, said in an emailed statement that the US regulator “inexplicably decided to sue Ripple.” He did not specify the exact nature of the lawsuit but asserted that XRP is a currency and “should not be registered as an investment contract” – a reference to the long-running debate over whether XRP is a security and is subject to regulatory disclosures.
“The Securities and Exchange Commission has allowed XRP to operate as a currency for more than eight years,” he said. He added that Ripple will challenge the lawsuit in the courts “to obtain clear rules of the road for the entire industry in the United States.”
XRP is down as much as 13%, touching its lowest level in nearly a week. The token has a market capitalization of around $21 billion, making it the largest cryptocurrency after Bitcoin and Ether, according to CoinMarketCap data. The lawsuit has not yet appeared on the list of court filings on the SEC website.
“The Securities and Exchange Commission should not be able to choose the form of innovation,” Garlinghouse said in a tweet from his verified account. “This battle has just begun.”
Ripple also earlier this year failed to persuade a judge to dismiss a proposed class action accusing the company of selling unregistered securities.
A request for comment from the Securities and Exchange Commission press office did not immediately respond.
The Securities and Exchange Commission – unlike other G-20 countries and the rest of the US government – should not be able to choose the form of innovation (especially when their decision is directly beneficial to China). Make no mistake, we are ready to fight and win – this battle is just beginning. (3/3)
– Brad Garlinghouse (@bgarlinghouse) December 22, 2020
The Securities and Exchange Commission said in July 2017 that companies that raise money through the sale of digital assets must comply with federal securities laws. The topic of whether Ripple is a security company has been at the center of debate within the sector since the Securities and Exchange Commission’s comments.