• The SEC is currently in the midst of a case against Ripple Corporation, the owner of XRP crypto token.
• The charge alleges that Ripple raised funds from investors and distributed billions of XRP without registering with the SEC.
• If this case goes through, it would set a precedent for other cryptos to be regulated as securities by the SEC.
SEC Case Against Ripple Corporation
The Securities and Exchange Commission (SEC) has filed charges against Ripple Corporation, alleging that they raised funds from investors without registering with the SEC. According to the charge, company executives Christian Larsen and Bradley Garlinghouse “effected personal unregistered sales of XRP totaling approximately $600 million”. If this case goes through, it could set a precedent for other cryptos to be treated as securities by the SEC.
Commodity or Security?
The crypto industry is waiting anxiously for Judge Analisa Torres’ decision on this case. Currently, most cryptos are traded on exchanges governed by the Commodity Futures Trading Commission (CFTC), however if this case goes through, many of these tokens will be classified as securities instead. Factors such as individual token news and macro factors like inflation have an impact on crypto prices just like commodities such as sugar, wheat, oil and gold.
Generally speaking, when there is excess liquidity in an economy – such as quantitative easing or money overprinting – we tend to see an increase in crypto prices due to increased buyer sentiment. Conversely when central banks enact policies like quantitative tightening or higher interest rates to reduce inflation, we may see a decrease in crypto prices due to decreased buyer sentiment.
Cointelegraph Innovation Circle
Cointelegraph Innovation Circle is a community where blockchain technology enthusiasts can come together and discuss ideas related to blockchain innovations and its potential impact on society. This community provides access to resources such as expert opinions from thought leaders in order to help shape our understanding of this rapidly evolving sector.
The outcome of this case between the SEC and Ripple Corporation could have far-reaching implications across different industries if cryptos are deemed securities instead of commodities under CFTC regulations. We encourage everyone interested in learning more about blockchain technology developments to join Cointelegraph Innovation Circle’s community today!