XRP Price Plunges After Ripple Says Company Will Be Sued by SEC

The price of XRP is down 16% after Ripple CEO Brad Garlinghouse said the company will be sued by the U.S. Securities and Exchange Commission (SEC).

The payments startup, which owns more than half of the total supply of XRP, is gearing up to fight accusations that the company has illegally sold the digital asset as an unregistered security, reports the Wall Street Journal.

Garlinghouse calls the move an attack on the entire industry.

“Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH.

We know crypto and blockchain technologies aren’t going anywhere. 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.

The SEC – out of step with other G20 countries and the rest of the US government – should not be able to cherry-pick what innovation looks like (especially when their decision directly benefits China). Make no mistake, we are ready to fight and win – this battle is just beginning.”

Ripple placed the majority of its XRP holdings in escrow back in 2017 and has routinely sold portions of its holdings to institutional investors and on crypto exchanges.

It also uses the digital asset to power one of its remittance platforms, called On-Demand Liquidity.

Ripple, which is also facing a class-action lawsuit on the status of XRP, has long argued that the cryptocurrency is not a security.

The company says XRP exists independently of Ripple and cannot be a security because investors in the digital asset are not shareholders of Ripple in any way.