XRP soars 28% as Ripple executives motion to dismiss SEC suit

Ripple Sign December 2020.JPG

Ripple Labs’ XRP token reached its highest point in over three years Tuesday morning after the cryptocurrency company executives filed a motion to dismiss the US Securities and Exchange Commission’s lawsuit against themselves and the company.

XRP gained 28% to reach a 24-hour high of $1.73 Tuesday. Earlier this month, XRP topped $1 for the first time since 2018 on the back of a broader rally in the crypto space. XRP’s price moves now make it the world’s fourth largest cryptocurrency by market capitalization.

Legal filings from April 12 show that CEO Brad Garlinghouse and chairman Chris Larsen filed a motion to dismiss the SEC’s lawsuit against them permanently. If granted, it would end the lawsuit against them.

The SEC lawsuit filed in December accused Ripple of effectively running a $1.3 billion unregistered securities offering with its sales of XRP, which the regulator deemed a security and not a cryptocurrency.

The motion to dismiss comes after two small victories for Ripple last week, when the court denied the SEC’s request for eight years of financial data belonging to Garlinghouse and Larsen, and rejected the subpoenas served by the SEC on a number of firms that had sought to obtain the executives’ financial records.

XRP isn’t the only cryptocurrency on a tear today. Bitcoin and Ether reached new all-time highs Tuesday morning ahead of Coinbase’s direct listing later this week.

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Ripple faces a SEC lawsuit for breaking investor-protection laws when selling its XRP cryptocurrency

In this photo illustration of the ripple cryptocurrency 'altcoin' sits arranged for a photograph on April 25, 2018 in London, England. Cryptocurrency markets began to recover this month following a massive crash during the first quarter of 2018, seeing more than $550 billion wiped from the total market capitalisation. (Photo by )

  • Ripple plans to defend itself against an expected SEC lawsuit over allegedly breaking investor-protection laws while selling its cryptocurrency, XRP.
  • In a series of tweets, Ripple CEO Brad Garlinghouse blasted the SEC’s decision to sue his firm right before the holidays.
  • “Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability and energy efficiency,” he said.
  • The lawsuit would come after years of debate about whether XRP is a security, or a cryptocurrency outside regulatory scope.
  • Visit Business Insider’s homepage for more stories.

Cryptocurrency firm Ripple is facing a lawsuit by the Securities and Exchange Commission for allegedly violating investor-protection laws by selling its XRP token, a security the regulator considers as unlicensed.

Ripple’s CEO Brad Garlinghouse tweeted that the SEC is unjustifiably attacking crypto and blasted chairman Jay Clayton’s decision to sue his firm right before the holidays.

“Jay Clayton is taking notes from the Grinch this holiday season, leaving the actual legal work to the next administration,” Garlinghouse said, referring to the chairman’s departure at the end of Trump’s presidential tenure. 

The lawsuit hasn’t been filed yet, but Ripple is aware of the regulator’s impending action. The fact that the crypto firm disclosed that it’s about to be sued is uncommon, highlighting its intention to defend itself against legal action.

“We know crypto and blockchain technologies aren’t going anywhere,” Garlinghouse said. “Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability and energy efficiency. It’s traded on 200+ exchanges globally and will continue to thrive.”

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Garlinghouse went on to say that the regulator isn’t in line with the rest of the US government, and shouldn’t limit innovation especially if its decision “directly benefits China.”

Over the past years, the SEC has filed, and mostly won, civil lawsuits against startups that breached securities laws when raising money via cryptocurrency sales. But none of those firms are as big as Ripple. XRP’s current market cap stands at about $22 billion, and it is the third-largest cryptocurrency after Bitcoin and Ethereum, according to data from Coin Gecko.

The lawsuit would come after years of debate between both sides about whether XRP is a security, or a currency that exists beyond the SEC’s scope of regulation.

The SEC did not immediately respond to Business Insider’s request for comment.

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