The cryptocurrency world and the Securities and Exchange Commission in the United States have a complex relationship. This has seen the commission clampdown on a number of fraudulent crypto schemes in the past, during the height of Initial Coin offerings (ICOs).
There have also been a number of legal disputes between the SEC and various crypto-related firms, mostly owning to the classification of various tokens and the treatment of the industry as a whole. One of the ongoing disputes is between the SEC and Ripple, the firm behind the popular token XRP.
Ripple vs. the SEC
The current issue is mostly between Ripple and Brad Garlinghouse, the CEO of Ripple. Most recently, Garlinghouse filed a motion to dismiss the current charges that were brought against him by the SEC which he calls a regulatory overreach.
Garlinghouse also took to social media to share some of the details of the case, with a link to a filing from his legal team. In the filling, his team claims that the SEC’s allegations do not hold water.
“First, the SEC fails to recognize the economic realities of Defendants’ transactions in XRP, the XRP market, and Ripple’s business, each of which exhibits none of the traditional characteristics of an investment contract,” it says.
The filing also alleges that the SEC is personally targeting Gralinghouse, who sold 60% of his XRP holdings for $159 million while still having 200 million XRP tokens. However, his team states that the sales in question are not a violation of US laws as the trade did not take place on US soil.
“The truth is that the vast majority of Mr. Garlinghouse’s XRP sales were made on foreign exchanges, and those transactions do not and cannot violate the federal securities laws,” his team says.
Ripple Makes Big Moves
While Garlinghouse is fighting these charges, Ripple has been making big moves behind the scenes. Just recently, Ripple moved almost $10 million in XRP tokens to what is believed to be one of their escrow wallets which are used for the selling of tokens.
Another transfer took place around the same time from Uphold, a crypto exchange, to Bitstamp, a popular crypto trading platform based in the EU. The amount of money sent was also $10 million in XRP tokens. In total, around $20 million in XRP was moved.