In December last year, the US Securities and Exchange Commission (SEC) planned to sue Ripple and accused it of selling XRP in violation of investor protection laws.
After nearly 3 months of controversy, there is now a new change in this incident, and the result may directly affect the price of XRP. Previously, XRP had plunged 70% due to SEC lawsuits.
According to BNN, the US Securities and Exchange Commission (SEC) requested the personal financial information of two Ripple executives in a lawsuit against Ripple.
The two executives are Ripple CEO Brad Garlinghouse (Brad Garlinghouse) and executive chairman Chris Larsen (Chris Larsen).
Prior to the news on February 19, the US SEC revised the indictment against Ripple to add new charges against the above two executives.
Currently, the SEC has issued subpoenas to six banks, including SVB Financial Group, First Republic Bank, Federal Reserve Bank of New York, Silver Lake Bank, Silver Gate Bank and Citibank.
In this regard, two Ripple executives publicly stated that the US Securities and Exchange Commission's requirements for bank subpoenas SEC are "completely inappropriate over-range" and infringement of privacy.
Two Ripple executives oppose the U.S. SEC's request for its financial information
Ripple co-founder Christian Larsen and CEO Bradley Garlinghouse asked a federal judge on Thursday to block the issuance of subpoenas to six banks for eight years of information; they said the request was in a lawsuit that did not involve suspected fraud. It is "completely inappropriate and radical behavior." They said that although they have agreed to provide relevant financial information, their personal financial information is not important. They added that the SEC's request violated privacy interests. They have agreed to provide records related to XRP transactions, as well as other compensation information provided by Ripple, but the SEC "clearly stated" that this is not enough.
The two lawyers stated in a letter to the court that the SEC has not and cannot provide a coherent explanation as to why it has the right to obtain this information. The SEC stated that the two men ignored the legal advice to treat cryptocurrencies as investment contracts and therefore as securities. Christian Larsen and Bradley Garlinghouse are accused of personal gains of approximately $600 million.
In fact, the objections of Christian Larsen and Bradley Garlinghouse are not very meaningful. The SEC has begun investigating their profitability, which may become new evidence in future Ripple cases.
If you lose the case, Ripple will leave the U.S.
On March 7, Ripple CEO Brad Garlinghouse (Brad Garlinghouse) said that if he loses in a disputed legal dispute with the US Securities and Exchange Commission, his company may move out of the United States.
If he were to start a new cryptocurrency company, he would not choose to establish it in the United States.
Prior to this, Ripple co-founder Chris Larsen said that the company kept its headquarters in San Francisco last week. Brad Garlinghouse (Brad Garlinghouse) is confident that Ripple can win the regulator's victory. The executive also claimed that even if Ripple abandons XRP to emphasize the reason that the token is not a security, XRP will continue to trade.
In public, he stated that the “lack of leadership” in the blockchain industry is not good for the country. The nature of American participation in the Internet as we know it today has become a source of huge profits. It has always been a source of geopolitical power. Therefore, I think our lack of leadership for next-generation technologies such as blockchain is not good for the United States.
Looking at it now, Ripple's attitude has also undergone some changes. The confidence in winning the lawsuit seems to be declining. Coupled with the collection of personal financial information, this has cast a shadow over Ripple's victory over the SEC.
The new SEC chairman may bring a turning point in the Ripple incident
On March 11th, Gary Gensler has passed a Senate committee vote, preparing to become the chairman of the US Securities and Exchange Commission (SEC).
The media interpreted this news as a new opportunity for the development of the entire encryption market. Because Gary Gensler has a good knowledge of the wide range of encryption technology and holds a very objective attitude towards blockchain and cryptocurrency.
He has worked for the well-known investment bank Goldman Sachs for 20 years, and served as a professor at the MIT Business School and a senior consultant for the digital currency project of the MIT Media Lab. Because one of the courses taught at MIT Business School is blockchain and currency. In this course, he teaches the development of Bitcoin and the impact of blockchain on the financial industry.
In December 2019, Gary Gensler also published an article "Even if a thousand projects fail, the blockchain is still a catalyst for change" at Coindesk, a well-known blockchain media website.
These experiences have shown that Gary Gensler is also an industry insider in the encryption industry, so it will play a positive role in the future of the entire encryption market.
This may be directly reflected in the Bitcoin ETF.
Today, Anthony Scaramucci, a former White House economic adviser and founder of Skybridge Capital, believes that because President Biden chose Gary Gensler to manage the SEC, Bitcoin ETFs are expected to be available in the United States before the end of this year. Approved.
The news that Gary Gensler is about to become the chairman of the SEC may also give Ripple a respite from the predicament. Ripple hopes that after taking office, one of the first moves is to withdraw the lawsuit against Ripple.
Former commissioner of the US Securities and Exchange Commission Paul Atkins (Paul Atkins) said that withdrawing the lawsuit is one of Gary Gensler's powers. "The incoming SEC chairman Gary Gensler can withdraw the lawsuit against Ripple. Otherwise, the case may eventually be submitted to the U.S. Supreme Court."
As early as 2018, Gary Gensler gave his opinion on whether XRP is safe. At an MIT conference in 2018, Gensler put forward the view that XRP and Ethereum are both considered securities.
Looking at it now, Ethereum is not a security considered by the SEC, and Ripple will not be a security either. There may be a result of withdrawing the lawsuit. Previously, Ripple executives stated that the SEC has always treated XRP and Ethereum with double standards. In fact, the two are very similar, and XRP should not be classified as a security, while Ethereum is not a security.
However, the final result of Ripple is not that Gary Gensler has the final say, it must be completely resolved through the court system, and there is still a lot of uncertainty in the future.