On December 22, 2020, the U.S. Securities and Exchange Commission (SEC) accused the Ripple blockchain company of selling unregistered securities worth $1.3 billion under the guise of XRP tokens, which Ripple itself issues. All these sales lasted, according to the department, for 7 years. The SEC accused Ripple of violating the registration provisions of the Securities Act, demanded a judicial ban on further sales, as well as the return of all funds received with compensation and payment of civil penalties. It is not surprising that XRP reacted to this news with a deafening drop, and so far the token is very noticeably reacting to all new twists in this difficult and very ambiguous matter. And here's what happened next.
In early 2021, the CEO and co-founder of Ripple told the court that the SEC had not properly informed them about the need to register XRP as securities, after which the SEC appealed to the judge demanding an immediate hearing. As a result, the court recognized that the Ripple coin has value and benefit, which is its difference from the same Bitcoin or Ethereum. And the SEC, at the request of the court, disclosed its internal policy regarding digital asset trading to better understand the essence and validity of the claims.
In particular, the court approved Ripple's request for information from the SEC on how the regulator classifies bitcoin and Ethereum, and what exactly in his opinion is the difference between XRP and bitcoin and other altcoins. After all, for example, in the notorious speech of former SEC employee William Hinman, it is claimed that Ethereum is not a security.
The proceedings are of a complex multi-stage nature, and, as the actions of the parties show, all participants are already tired of it. That is why on September 17, 2022, the SEC and Ripple filed petitions with the court for an immediate decision on the recognition or absence of a violation of the US securities laws by Ripple XRP sales. They called on the federal judge to make a decision in summary proceedings. In their opinion, enough evidence has already been provided for this. And on December 2, Ripple filed final objections to the court regarding the request for a simplified decision. According to experts, the final decision on the case and a single large document will finally be provided by the court in March 2023.
Is this process important for the crypto industry? Definitely. If the court sides with the SEC, then regulatory, legislative and law enforcement agencies will have much more opportunities to influence the activities of various crypto projects. Thus, regulatory risks will increase, which is why the crypto market can expect a real sale - amid fears, investors will simply begin to get rid of coins. And if Ripple wins, as she initially stated, she will be able to stand up for the interests of all colleagues.
So, the SEC case against Ripple is a high-profile and important process in which state regulators for the first time entered into such a global confrontation with a representative of the crypto industry. Therefore, the decision on it may well set a trend for similar precedents in the future.
