Ripple Effect: SEC Lawsuit against Cryptocurrency Company May Provide Guidance For Crypto Industry | SmithAmundsen LLC

Ripple Effect: SEC Lawsuit against Cryptocurrency Company May Provide Guidance For Crypto Industry | SmithAmundsen LLC

On December 21, 2020, the Securities and Exchange Commission (SEC) filed a high-profile enforcement action against a major cryptocurrency company. The SEC complaint alleges violations of federal securities laws by defendant Ripple Labs, Inc. (“Ripple”). Founded in San Francisco in 2012, Ripple is a well-established company, and its founders are regarded as pioneers in the crypto industry.

The SEC complaint alleges that Ripple sold its cryptocurrency, named XRP, as an unregistered security. The SEC argues that XRP is a security, and not a commodity or other type of asset, because it was generated, distributed, and sold by Ripple in a “centralized fashion.”

Is XRP an…

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