On Thursday (January 7), Ripple CEO Brad Garlinghouse, answered five of the most frequently asked questions about the action filed last month by the U.S. Securities and Exchange Commission (SEC) against Ripple, himself, and Chris Larsen.
As every XRP HODLer must know by know, on 22 December 2020, one day before former SEC Chairman Jay Clayton resigned, the SEC announced that it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”
According to the SEC’s complaint, Ripple, Ripple Co-Founder and Chairman Christian Larsen, and current Ripple CEO Bradley Garlinghouse “raised capital to finance the company’s business.” The SEC alleges that:
- Ripple “raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide.”
- Ripple “distributed billions of XRP in exchange for non-cash consideration, such as labor and market-making services.
- The defendants “failed to register their offers and sales of XRP or satisfy any exemption from registration, in violation of the registration provisions of the federal securities laws.”
Well, yesterday, Garlinghouse took to Twitter to answer five key questions.
The Ripple CEO says that Ripple did try to settle this matter with the SEC and “will continue to try w/ the new administration” to “resolve this in a way so the XRP community can continue innovating, consumers are protected and orderly markets are preserved.”
With regard to the allegation that Ripple paid certain crypto exchanges to list XRP, he says:
“XRP is one of the most liquid (top 3-5) digital assets globally, and 95% is traded outside the US. Ripple has no control over where XRP is listed, who owns it, etc. It’s open-source and decentralized.“
Garlinghouse also points out that delisting of XRP and suspension of XRP trading are not the same thing:
“Delisting and halting are 2 separate things – most are halting trading. With 8 different govt agencies, each with their own (and sometimes opposing) views of crypto, U.S. market participants are facing conflicting policies and no surprise, some act conservatively.“
As for Ripple’s response to the SEC’s complaint, he says:
“The legal process can be slow! Things may seem quiet, but there is plenty happening behind the scenes. We’ll be filing our initial response within weeks.“
And regard to the allegation that Ripple paid some customers to use its products, he says:
“We have provided some customers, especially first movers, w/ incentives to use ODL – this is building a payments network 101 (and totally lawful). Every payments network (PayPal, Visa, MC, etc) has or still uses incentives.”
Stuart Alderoty, Ripple’s General Counsel, made an important point yesterday:
According to data by CryptoCompare, currently (as of 09:42 UTC on January 8), XRP-USD is trading around $0.3252, up 6.66% in the past 24-hour period.