Ripple Labs Inc. is the third largest cryptocurrency provider in the world.
The U.S. Securities and Exchange Commission (SEC) case argues that XRP is more of a security than a currency, so the issuer must seek the prior approval of the U.S. Securities Regulator to issue it. Ripple Labs and its two executives have raised more than $ 3.3 billion by issuing their unregistered digital asset bonds.
Launched in December 2013, XRP had a market cap of about $ 16 billion on December 25, which is two-thirds of the $ 24 billion valued at $ 21 billion.
On December 22, SEC filed a complaint against Ripple for “issuing unregistered securities”, alleging that the XRP was more secure than currency. The issuance of bonds in the United States requires the approval of the SEC. Thus the retail price fell from 0.56 US dollars on December 21 to 0.28 currencies on December 24, which is 50% less. On December 25, the currency traded up 0.33 cents, just above its recent lows.
Indian cryptocurrency exchanges expressed shock at the growth.
“Ripple (XRP) is one of the most popular cryptocurrencies. This is one of the most traded tokens on WazirX. The SEC case against Ripple is shocking. Given the uncertainty of the situation, we will continue to monitor the progress of the case and then take the necessary steps, ”said Siddharth Menon, co-founder and CEO of WazirX, based on India’s largest cryptocurrency module.
Neeraj Kandelwal, co-founder of the crypto exchange CoinDCX, said, “We are closely following the developments and awaiting further information on this matter before making a decision.”
Cryptocurrency experts also showed the difference between XRP and other cryptocurrencies.
“Anyone can hack cryptocurrencies like Bitcoin and Ethereum. Neither the issuer nor the owner. This was never the case for XRP. Ripple Labs owns 98% of it, and publishes quite a bit each year. The company set up distribution (100 billion tokens). It’s more like a security than a cryptocurrency, ”said Kaura Rao Tahak, chief executive of Pitbans, a cryptocurrency exchange.
The case also affects regulators in other countries, including India.