One of the most popular cryptocurrencies, Ripple, faces a lawsuit for unregistered sale of securities.
After the SEC lawsuit against Ripple Labs Inc. was officially released yesterday for the unregistered offer of securities, the traders decided to get rid of and sell XRP.
The Securities and Exchange Commission specified that the company mediated an unregistered and still ongoing offer of securities in digital form thanks to which they raised more than $ 1.3 billion.
Ripple has been raising funds in this way since 2013, when it offered digital securities to investors in the United States and around the world. The company co-founder, Christian Larsen and former CEO; Bradley Garlinghouse also organized personal unregistered sales of XRP totaling approximately $600 million.
Stephanie Avakian, Director of the SEC’s Enforcement Division, also commented on the case:
We allege that Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.
Investors and the market did not have to wait long and immediately after the publication of the report, the cryptocurrency XRP faced massive sales.
XRP lost almost 40% of its value in 24 hours.
Read also: SkyBridge Capital, a New York investment company is launching a Bitcoin Fund
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