Brad Garlinghouse, Ripple CEO.
Iain Chiala CNBC
The Securities and Exchange Commission filed charges Tuesday against Ripple, the most famous fintech company for cryptocurrency XRP, and two of its directors, for allegedly violating investor protection laws .
The SEC said Ripple, co-founder Christian Larsen and CEO Bradley Garlinghouse, raised more than $ 1.3 billion through an unlisted securities offering.
“We contend that Ripple, Larsen, and Garlinghouse did not register their ongoing offer and sold billions of XRP to retail investors, which removed potential buyers of relevant publications about the XRP and Ripple industry and long-term protections. Another important time that is fundamental to our strong public market system, “Stephanie Avakian, director of the SEC ‘s Enforcement Division, said in a press release.
Garlinghouse had expected a lawsuit to be filed before Christmas. In a statement late Monday, he said the SEC suit was intended to be “fundamentally wrong as a matter of law and fact” and questioned his time.
“XRP is money, and it doesn’t have to be registered as an investment contract,” Garlinghouse said.
XRP was created and distributed by Ripple’s founders in 2012, and is designed to enable fast cross-border payment. The value of the currency against the U.S. dollar has doubled around early November, thanks to a spike in the latter part of that month, but it is still down more than 80% from the high at the end 2017, while Bitcoin’s competitive cryptocurrency recently hit full-time highs.
The latter company was given private value at $ 10 billion and is backed by the likes of Japanese financial services giant SBI Holdings, Spanish bank Santander and major venture capital firms including Andreessen Horowitz, Lightspeed and Peter Thiel Foundation Fund.
Ripple was ranked 28th on this year’s CNBC Disruptor 50 list.
– Ryan Browne and Kate Rooney from CNBC contributed to this report.
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