Friday, February 26, 2021

SEC Refers To XRP As a “Digital Asset Security” In Its Amended Complaint, Makes Its Stand Confusing

The United States Securities and Exchange Commission (SEC) has on 18th February 2021 filed an amended complaint, focusing on the mode of using the digital token XRP by Ripple, the cross-border payment, and the two of its top executives, Brad Garlinghouse and Chris Larsen.

A particular statement in the amended complaint that’s raising questions than answers for XRP community members is the fact that the SEC referred to the embattled crypto as a “digital asset security”.

Read Also: Brad Garlinghouse Addresses 5 Key Questions about the Legal Battle between Ripple and SEC

The amended complaints filed by the SEC reads in part as follows:

“From at least 2013 through the present, Defendants sold over 14.6 billion units of a digital asset security called “XRP…”

The major question a community member asked in reaction to the amended complaint is that if XRP is a security, why is the SEC referring to it as a digital asset?

The supposed XRP community member wrote, “What the hell is a digital asset security, is this a joke?”

Read Also: Why a Prominent XRP Enthusiast Is Considering Leaving XRP Community for Good

SEC Says Brad Garlinghouse Continues To Long XRP

According to the SEC, Ripple CEO Brad Garlinghouse has oftentimes touted that he’s very long XRP, indicating he owns a lot of the cryptocurrency:

“…orchestrated these unlawful sales and personally profited by approximately $600 million from their unregistered sales of XRP.

“Garlinghouse did so while repeatedly touting that he was “very long” XRP, meaning he held a significant position he expected to rise in value, without disclosing his sales of XRP.”

Adding that “Defendants continue to hold substantial amounts of XRP and—with no registration statement in effect—can continue to monetize their XRP while using the information asymmetry they created in the market for their own gain, creating substantial risk to investors.”

SEC Accuses Brad Garlinghouse of Offering Incentives to List XRP on Trading Platforms

Going by the amended filing, the SEC says that a December 2016 email reveals that Ripple made an effort to list XRP on various trading platforms using an incentive program:

“In December 2016, Garlinghouse again sought to get XRP listed on Platform A. In a December 1, 2016 email, he stated that Ripple’s 2017 “incentive program” for exchanges, along with Ripple’s efforts to increase institutional adoption of XRP for settlement, would “enhance the opportunity for [Platform A’s] traders” and that Ripple was “happy to offer minimum monthly guarantees in 2017 to get this onto your near term priorities list.”

Read Also: David Schwartz Says XRP Community Could Force Ripple To Burn Its Over 50 Billion XRP

The regulator also mentioned a number of instances whereby Brad Garlinghouse and Chris Larsen participated in making XRP available on exchanges.

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Solomon Odunayo
Solomon has a growing passion for writing, this propelled him to keenly work on Eagles News Media for about two years before delving into the cryptocurrency and Blockchain industry he finds more interesting. He worked as a crypto Journalist and Editor at NewsLogical before joining Herald Sheets, owing to the priceless experience he has accumulated since he became a contributor in the crypto community.

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