Ripple Effect: Thousands of people enter the fray against SEC
Updated
More than 70,000 Ripple investors have joined a class-action lawsuit against the United States Securities and Exchange Commission (SEC), says a lawyer representing XRP coin holders.
John Deaton said Sunday on Twitter that people of diverse backgrounds from all 50 American states, every US territory and 141 countries have joined forces in the legal dispute against the regulator.
This is one of a number of crypto-related court cases in the US.
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SEC launched suit in 2020
In 2020, the SEC sued Ripple Labs, the company behind the cryptocurrency. Ripple CEO Brad Garlinghouse and co-founder Christian Larsen were also named in the lawsuit, which alleges that the company raised more than $1.3bn (£1.06bn) “through an unregistered, ongoing digital asset securities offering.”
XRP investors responded by suing the regulator, arguing that former SEC official William Hinman misled them when he said in 2018 that fundraising efforts in relation to the creation of ether (ETH), which is backed by the Ethereum blockchain, did not constitute securities transactions.
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Important court victory
Ripple scored an important court victory in mid-July as US Magistrate Judge Sarah Netburn denied the SEC's motion to prevent Hinman’s views on ether from being used as evidence.
Ultimately, the SECs lawsuit against Ripple could determine whether XRP and, potentially, all other digital coins are regulated as securities in the US, one of the world’s largest markets.
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Gensler’s position clear
SEC chief Gary Gensler has made it clear that he wants all cryptocurrencies to be registered as securities. Many observers are monitoring the case because they view it as one that could affect the entire crypto industry.
No guarantee
But there is no guarantee that the SEC will even govern crypto over the long term. President Joe Biden’s administration is evaluating which federal agency would be best to govern digital assets.
The Ripple coin holders’ expanded class-action lawsuit did not affect XRP’s price in a meaningful way on Monday. XRP was up marginally around the time that conventional markets closed in North America.
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