Ripple’s XRP has lost almost 40% of its value, from $0.51 on December 21 to around $0.31 at the time of writing. The plunge appears to have happened due to the US Securities and Exchange Commission’s lawsuit against Ripple and two of its executives, CEO Garlinghouse and Co-founder Larsen. The cryptocurrency has since traded volumes of around $4.85 billion recorded in the last 24 hours.
This huge selling of the XRP token appears to have resulted from the Ripple CEO Brad Garlinghouse’s announcement that the SEC would launch a legal proceeding against them and their company. The following day, The Securities and Exchange Commission announced that they filed a $1.3 billion legal action against the two executives and their company, Ripple, for alleged conducting of an unregistered security offering.
In light of the continuous drop of the XRP’s value, Garlinghouse angrily accused the SEC of being biased against his company and their token while appearing to allow free passes for Bitcoin and Ethereum. As previously said by the SEC, they say that XRP is a security, which means s that it is subject to what the US Securities Act dictates. The Ripple CEO, who repeatedly threatened to exit the United States because of SEC’s regulatory approach, doubled down on this and rejected the newly clarified characterization of XRP as a security.
In his several public announcements and attempts to push back against the US Securities and Exchange Commission, Garlinghouse claims that the XRP token is a capable and fully functioning currency that can offer a better alternative. He also adds that aside from Bitcoin and Ethereum, “the two Chinese controlled virtual currencies” according to Ripple, XRP currently ranks as the most capitalized cryptocurrency tokens.
However, the latter comment gained some flak and has prompted swift responses from some Bitcoin users and the creator of Ethereum, Vitalik Buterin. On Twitter, he accused Garlinghouse, along with his team, of “sinking to new levels of strangeness.” Also weighing in on the subject, the CEO of Galaxy, Mike Novogratz, said that he “finds it strange that Clayton waited years to do this.”
In contrast, Ryan Selkis thinks that the SEC will lose the case as they are “outclassed on legal.” He also adds that classifying XRP as security will further hurt US businesses while global companies will continue making these markets.
Another thing to note, as of the time of writing, there are currently new reports that the Hong Kong trading platform OSL has suspended XRP services because of this lawsuit.