Ripple CEO Brad Garlinghouse answered questions regarding the SEC’s lawsuit against the company on Twitter. He addressed five key areas in the case including investors confidence in the company, the delisting/halting of XRP on trading platform, incentives to use XRP, the filing of initial response to the SEC, and efforts to settle the case.
On December 22, the SEC sued Ripple, its CEO Garlinghouse, and Chairman Chris Larsen for allegedly conducting an unregistered initial coin offering (ICO). They allegedly unlawfully raised $1.3 billion from investors by selling unregistered XRP digital tokens, which the Commission considers as securities. The pre-trial hearing on the case is set on February 2.
In a series of tweets addressing questions regarding the SEC lawsuit, Garlinghouse assured Ripple users and investors that the company’s legal team headed by its General Counsel Stuart Alderoty is committed to the case. He said they will not give up the fight, they are looking forward to their day in court, and will be “engaging with the new SEC leadership once appointed.”
In fact, Garlinhouse said Ripple will be filing its initial response to the SEC lawsuit within weeks. He also emphasized, “The legal process can be slow!”
Q: When are you responding to the SEC? Why are you silent?
The legal process can be slow! Things may seem quiet, but there is plenty happening behind the scenes. We’ll be filing our initial response within weeks. Legal eagle @s_alderoty shares more 6/10 https://t.co/PIAsgohcG5
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
Ripple tried to settle with the SEC
The Ripple CEO also disclosed that they tried to settle with the SEC and will continue to do so with the new administration. He explained that he cannot provide further details about their efforts.
Q: Why didn’t Ripple settle with the SEC?
Can’t get into specifics, but know we tried – and will continue to try w/ the new administration – to resolve this in a way so the XRP community can continue innovating, consumers are protected and orderly markets are preserved. 2/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
With regards to the questions about the XRP, Garlinhouse said Ripple “provided some customers, especially first movers, with incentives to use its On-Demand Liquidity product.”
He also stated that Ripple has no control over cryptocurrency trading platforms listing XRP, which is open-source and decentralized. He also explained that most trading platforms such as Coinbase are just halting the XRP trading.
Delisting and halting are 2 separate things – most are halting trading. With 8 different govt agencies, each with their own (and sometimes opposing) views of crypto, U.S. market participants are facing conflicting policies and no surprise, some act conservatively. 4/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
What’s awaiting Ripple and CEO
The SEC lawsuit against Ripple isn’t the only problem that the company is facing. Last week, Tetragon Financial Group, a major investor in the company’s Series C investment round, filed a lawsuit against the company.
The Ripple claimed that Tetragon is taking advantage of the company via the SEC lawsuit. Moreover, he assured XRP uses that the company’s investors remains confident in the company.
Q: Do investors have faith in Ripple?
Yes, we have real shareholders. That is how you own Ripple equity – buying our stock, not buying XRP. We’re disappointed that Tetragon (who owns 1.5% of Ripple) is seeking to unfairly advantage itself through the SEC’s allegations. 7/10
— Brad Garlinghouse (@bgarlinghouse) January 7, 2021
The SEC lawsuit resulted in huge losses to Ripple and its investors. Joseph Grundfest, a former SEC commissioner suggested that the company’s investors could suffer multibillion-dollar losses from the Commission’s enforcement action, which he noted lack of allegations of fraud, misrepresentation, or omission.
Garlinghouse is planning to relocate the company to Japan since 95% of XRP customers are located overseas.
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