In this article, we will discuss the XRP update at a glance and the continuation of his case with the SEC. On December 22, 2020, the SEC announced that it was suing Ripple labs, the publisher of XRP and two of its top brass, for raising approximately $1.3 billion through an ICO.
In the SEC’s view, XRP has been deemed to be selling Unregistered securities. Because of this case Ripple spent 100 million dollars just to face the legal case.
What are securities?
Securities are investment contracts. According to the admin, XRP is actually just a product or item that is produced by Ripple in digital form. If the price goes up and down it’s because of Supply and Demand. Does not automatically make it an investment securities. The issue with this SEC is that XRP is considered an investment contract even though it is only a product or goods.
How can an asset be considered a securities or investment product?
To determine an asset is an investment or not, the SEC uses the HOWEY test, which is a simple test to determine whether a transaction is an investment contract.
There are 4 elements that must be met in a transaction called securities or investment contracts.
1. There is money invested.
2. In a company
3. There is an expectation of profit
4. Profit is generated because of the efforts of others.
Continuation of XRP vs SEC case and Ripple ecosystem development
- Ripple is granted the right to access SEC documents.
And this is a small victory from the battle with the SEC because Ripple is given the right to access SEC documents whose contents are related to Ripple Etherium and Bitcoin. - Drama with Charles Hoskinson
Charles Hoskinson, the founder of Cardano, was arguing with the XRP community, who during an interview commented on the XRP and SEC cases, that Charles Hoskinson said there was no corruption whatsoever in the SEC, only conspiracy theories created by XRP investors. And because that statement angered the XRP community. - Gary Gensler sued to resign from SEC
Gary Gensler petitioned on Change.org demanding to quit the SEC - XRP is used as the Base Layer of the CBDC.
Despite a lawsuit from the SEC, the ecosystem of XRP continues to grow, one of which is used as the Base Layer of the CBDC. Ripple itself claims its blockchain transacted more than 70 million transactions over the last 10 years. Ripple is also one of the crypto projects closest to banking and has the potential to replace the SWIFT system.