SEC calculates cryptocurrency agency Ripple, 2 executives

Brad Garlinghouse, CEO of Ripple.

John Chiala | CNBC

The Securities and Exchange Commission on Tuesday filed indictments against Ripple, the fintech company best known for cryptocurrency XRP, and two of its executives for allegedly violating investor protection laws.

The SEC claimed Ripple, co-founder Christian Larsen and CEO Bradley Garlinghouse, raised more than $ 1.3 billion through an unregistered securities offering.

“We claim that Ripple, Larsen and Garlinghouse have failed to register their ongoing offering and sales of billions in XRP to retail investors, which provides prospective buyers with adequate information about XRP and Ripple’s business and other important long-term protections that are fundamental to our company , withheld. ” robust public market system, “said Stephanie Avakian, director of the SEC’s enforcement division, in a press release.

Garlinghouse had expected a lawsuit to be filed before Christmas. In a statement late Monday, he said the SEC’s anticipated lawsuit was “fundamentally wrong, legally and factually,” and questioned its timing.

“XRP is a currency and does not need to be registered as an investment contract,” said Garlinghouse.

XRP was created and distributed in 2012 by the founders of Ripple and is designed to enable fast cross-border payments. The currency’s value against the US dollar has roughly doubled since early November thanks to a surge in the second half of this month, but is still down more than 80% from its late 2017 high, while rival cryptocurrency Bitcoin has recently dropped in value reached all-time high.

The company most recently had a private value of $ 10 billion and is backed by companies like Japanese financial services giant SBI Holdings, Spanish bank Santander, and leading venture capital firms like Andreessen Horowitz, Lightspeed and Peter Thiels Gründerfonds.

Ripple was ranked 28th on this year’s CNBC Disruptor 50 list.

– CNBC’s Ryan Browne and Kate Rooney contributed to this report.

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