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Ripple Effect: Thousands of people enter the fray against SEC

By Monte Stewart


Updated

Thousands of people have entered the fray as XRP investors sue the SEC. - Photo: Shutterstock

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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XRP to USD

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.

UNI to USD

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.

DOGE/USD

0.14 Price
+7.990% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.60 Price
+3.700% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

67,596.15 Price
+0.800% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

SOL/USD

175.25 Price
+2.730% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

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.

RUNE to USD

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.

Markets in this article

UNI/USD
Uniswap / USD
8.06552 USD
0.04438 +0.560%
XRP/USD
Ripple / USD
0.60021 USD
0.02118 +3.700%
ETH/USD
Ethereum / USD
3538.76 USD
25.25 +0.720%

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Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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