Currently, fintech firm Ripple is already the subject of several lawsuits alleging that it violated SEC rules by selling unregistered securities during the sale of the XRP crypto token.
But in another coup, lawyers for a company called Bitcoin Manipulation Abatement LLC filed a new lawsuit in the U.S. Federal District Court on May 1, 2020.
Consequently, according to court documents, Bitcoin Manipulation Abatement LLC accuses Ripple and its CEO, Brad Garlinghouse, of offering and selling unregistered securities.
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Source: courtlistener.com
The lack of regularity clarity represents the point of convergence for the ripple
The United States does not have a uniform legal framework for digital assets. This lack of decision contributes to distance technological innovation from the American coasts.
With that, the authorities are aware that the outcome of Ripple's ongoing lawsuits could further exacerbate this situation. Side effects can be this EA. USA Lose ground to crypto-friendly nations.
Caitlin Long, a former managing director of Morgan Stanley commented on the foreign robbery as a direct result of the SEC's indecision.
"The SEC position sparked a massive surge of startups into offshore jurisdictions … Left and right lawyers were telling clients," Don't issue tokens to US investors and don't live in the US United. "
But is it too late? The Facebook Libra Foundation raised many doubts last year when it announced that it was establishing its base in Geneva, Switzerland.
However, David MarcusThe Libra leader was quick to point out that it was not about escaping American regulators. Instead, Marcus said that several influential organizations are already based in Switzerland. Improve the movement for the crypto-focused business.
"We chose Switzerland not to avoid liability or oversight, but rather because it is a well-established financial location where the World Trade Organization, the Bank for Internal Settlements and ; other financial institutions. "
In any case, it is difficult to argue that EE. USA It has lost no more ground. Switzerland announced in February 2018 that some ICOs are not securities. This effectively declared Switzerland as one of the main candidates for the conduct of cryptographic transactions.
More than two years later, the SEC continues to postpone a values framework for cryptography. As a result, Ripple must feel hard for.
New bill does not consider digital assets as securities
Under the current circumstances, it appears that the SEC is waiting for the legal system to decide whether the XRP encryption token is secure or not.
It could be argued that such a decision falls within the jurisdiction of the SEC, not the United States' judicial system.
However, news amendment to the bill Updating California securities law may mean that Ripple gets a postponement of pending lawsuits.
The state of California, home to Silicon Valley, is working to clarify what is meant by security. The amendment to the bill excludes digital assets from the definition of security.
"The investment contract, with the exception of any digital asset that meets one of the following criteria, is probably not an investment contract."
If passed, this amendment to the bill would effectively quash the charges that Ripple acted against securities regulation by selling XRP.
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