.png)
If you thought 2020 could not get any worse, well think again. XRP has found itself as the center of attention as we wrap up the year. The SEC is rumored to have initiated a class action lawsuit against XRP. At the time of this writing, there appears to be no recorded filings from the SEC on Ripple Labs. That does not mean that there will not be any fillings later.
These types of lawsuits are nothing new. They happen every year to some of the top businesses in the world. For example, according to Bitcoin News, the plaintiff Chase Williams’ class-action complaint against Binance and founder Changpeng Zhao says the exchange sold unregistered securities as digital tokens. Tokens named in the lawsuit include EOS, BNT, SNT, QSP, KNC, TRX, FUN, ICX, OMG, LEND, ELF, and CVC.
On August 27, 2020, Tezos settled a lawsuit for a $25 million settlement in response to a class action lawsuit for violating federal securities laws by failing to register their initial coin offering (ICO), which is like an initial public offering (IPO) in the stock market.
I've already mentioned 13 crypto projects that have had lawsuits. Disney has had over 1,500 lawsuits. Tesla, not even close in age to Disney, has already accumulated 800 lawsuits. The bigger you are, the bigger target you become. Here is a list of prominent companies that have gone through similar lawsuits, including J.P. Morgan Securities, Citigroup, Bank of America, and Wells Fargo: https://www.sec.gov/spotlight/enf-actions-fc.shtml.
Regulatory insight is indeed needed for the crypto space to flourish. Investors need confidence and clarity. It is my opinion that the Commodity Futures Trade Commission needs to come out with a strong statement. It has been mentioned on numerous occasions that XRP does not meet the Howey test, which is used to determine whether something is a security.
For a while, I have hinted that most exchanges will eventually aim to be compliant with the SEC in such a manner that would allow for exchanges to be a custodian of securities. Here is an article that speaks directly on that. https://www.coindesk.com/sec-gives-broker-dealers-room-to-handle-crypto-securities
It makes us question: Why would the SEC decide to make a strong statement in the last quarter of the year during the last month? Could it be that this is a stage play to give the elite a chance to load their bags at the expense of retail traders selling off their assets? Only time will tell. However, it does make one wonder why these events have come at such a time as this.