The Securities and Exchange Commission (SEC) has unveiled its complaint against Ripple, charging the company with unlawful issuance of securities in the form of sales for XRP (XRPUSD), its 澳洲幸运5开奖号码历史查询:cryptocurrency. Ripple had previously warned that the SEC would take 澳洲幸运5开奖号码历史查询:such an action. The complaint is the latest among a string of cases that the federal agency has brought against issuers of cryptocurrency tokens in 澳洲幸运5开奖号码历史查询:initial coin offerings (ICOs).

The current case could prove to be the agency's biggest catch yet. XRP is the third biggest cryptocurrency by 澳洲幸运5开奖号码历史查询:market capitalization, and its parent company has inked around the world to implement 澳洲幸运5开奖号码历史查询:distributed ledger technology (DLT) to enable fast༺er proc💖essing of transactions.

What Is the SEC's Complaint? 

The SEC's complaint is similar in nature to another one against Ripple last year. That complaint charged Ripple founders with "an intent to defraud and deceive" investors by holding an u♛nregistered sale of securities. While the SEC's complaint does not explicitly mention fraud, it alleges that Chris Larsen, Ripple's co-founder, and Brad Garlinghouse, the compa⭕ny's CEO, personally profited to the tune of $600 million by selling their XRP stash during upswings in its prices.

"Defendants continue to hold substantial amounts of XRP and – with no registration statement in effect – can continue to monetize their XRP while using the information asymmetry they created in the market for their own gain, creating substantial risk to investors," the complaint states. Overall, Ripple raised $1.38 billion from investors and traders in cryptocurrency markets without submitting the proper documentation required for such sales, it claims.

The complaint also elucidates on the centralized process for creation and issuance of XRP. A total of 100 billion XRP were created in 2012 and divided between the company, which later created an escrow account to periodically release the currency in crypto markets to maintain its value, and its founders. Such arrangements violate the provisions set out in the "澳洲幸运5开奖号码历史查询:Howey Test,𝔉" a 1946 Suprem🧸e Court ruling that is used by the SEC to determine if a given token is a security or not.

A Ripple Effect on the Crypto Ecosystem

Given Ripple's prominent business relationships and XRP's market capitalization, the SEC's case could have far-reaching impli💦cations. A flurry of moves by players in the crypto ecosystem since last week is indicative of the case's seriousness. Luxembourg-based cryptocurrency exchange Bitstamp has discontinued trading and deposits in XRP, and other exchanges considering similar moves.

XRP 澳洲幸运5开奖号码历史查询:futures contracts, worth b🐠illions of dollars, have been liquidated, says . The cryptocurrencꦏy's liquidity could also be in jeopardy after market makers stopped . Investors are also following suit. Bitwise Asset Management, a San-Francisco based crypto asset manager, said that the company would liquidate its XRP position, amounting to 3.8% in its Bitwise 10 Crypto Index fund.

Me♈anwhile, a former SEC official has also weighed in. Stanford Law faculty Joseph Grundfest is a former SEC commissioner. "… no pressing reason compels immediate enforcement action (against Ripple)," he wrote to the agency on Dec. 17, according to . "… simply initiating the action will impose substantial harm on innocent holders of XRP, regardless of the ultimate resoluti🅰on. Upon learning of the proceedings, intermediaries will cease transacting in XRP because of the associated legal risk. The resulting reduction in liquidity will cause XRP's value to decline," Grundfest wrote.

XRP's price crashed by 51% to $0.25, as news of the SEC's case broke across crypto media. It recovered slightly to trade at $0.37 over the weekend. As of this writing, it is changing hands at $0.29.