The SEC recently increased its scrutiny of the cryptocurrency realm. This has also pushed some of the industry giants, including Coinbase, to demand a clear regulatory framework.
Ripple Labs Inc., the firm that created the cryptocurrency XRP, together with its co-founders Chris Larsen and Brad Garlinghouse, were sued by the SEC in December 2020. The SEC claimed that Ripple sold XRP tokens to investors in a $1.3 billion unregistered securities offering.
According to the SEC, Ripple ought to have registered its token sales with the commission, and XRP should be categorized as a security. On the other side, Ripple vigorously refuted the accusations.
A number of cryptocurrency exchanges delisted or temporarily suspended trading of XRP as a result of the lawsuit’s major uncertainty and unfavorable sentiment surrounding the coin. If Ripple comes out victorious in the lawsuit, it will be a major blow to the SEC and a major win for the crypto industry.