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October 4, 2022
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SEC drags Ripple to court and XRP collapses

The news is now official. The announcement was made by CEO Brad Garlinghouse.

The dispute concerns the same old story. According to the United States Securities and Exchange Commission – SEC, XRP is a security. Therefore, you must be subject to the regulations governing the sale of securities in the United States. In other words, Ripple’s cryptocurrency XRP lacks the characteristics of Bitcoin and Ethereum, which are not securities according to the SEC. In short, Ripple is accused of selling securities without proper licenses.

The news bothered the Ripple team. The CEO explained in a series of tweets:

Today, the SEC voted to attack cryptography. President Jay Clayton – in his final act (on leaving, org.) – is choosing winners and trying to limit the United States’ innovation in the crypto industry to BTC and ETH.

In doing so, the sector will be paralyzed:

We know that cryptography and blockchain technologies are not going anywhere. Ripple has used and will continue to use XRP because it is the best digital payment asset – speed, cost, scalability and energy efficiency. It is traded on more than 200 exchanges worldwide and will continue to thrive.

And he concludes by declaring war:

The SEC – at odds with other G20 countries and the rest of the U.S. government – should not be able to handpick what innovation looks like (especially when its decision directly benefits China). Make no mistake, we are ready to fight and win – this battle is just beginning.

XRP sinks following a legal battle between Ripple and the SEC

News of the legal battle between Ripple and the SEC are lowering the price of XRP. Encryption today lost more than 8% and their prices went back below the psychological mark of 50 cents, reaching $ 0.48 . Among the top 100, Ripple is one of the worst today, behind only The Graph (GRT, -13%).

Ripple has lost nearly 30 percent since his record on November 24, when it was above 70 cents. The price also doesn’t seem to have been much affected by the Bitcoin rally.

Why is XRP different from Bitcoin and Ethereum?

But why is the SEC challenging XRP? Because unlike Bitcoin and Ethereum, he considers it a centralized product. Bitcoin and Ethereum are controlled by a community, which generates the two cryptocurrencies through mining. BTC and ETH are extracted and placed on the market.

XRP is not extracted. The quantity is predetermined. Much of the XRP is owned by Ripple, which gradually injects it into the market. It is precisely this possession of tokens that has raised suspicions about Ripple, which has been accused of influencing price in some way. It is no coincidence that the peak price of XRP in the last week of November came after the company announced that it would buy XRP to maintain a healthier market.

Now it will be up to a court to decide whether, despite these peculiarities, the XRP is a cryptocurrency in its own right or if it is a security.

Source: CryptoGlobe

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