Ripple’s battle with the United States Securities and Exchange Commission continues to unfold with the commission filing its first amended complaint against the blockchain payments company, and its top executives CEO Brad Garlinghouse, and ex-CEO Chris Larsen.
The billion-dollar complaint outlines some factual information about the defendants, accusing them of playing a “significant role” in executing Ripple’s unregistered sales of the XRP cryptocurrency. The commission states multiple instances when Ripple’s sales adjustments were utilized by the executives to manipulate the token’s performance.
In April 2016, Ripple CFO had emailed Larsen and Garlinghouse regarding the “downward pressure on the price of XRP.” He suggested having the Market Maker “adjust down a bit our net sell target for a few days to see if we can help stabilize and/or increase the XRP price.”
Larsen agreed to this and responded, “Yes – let’s adjust,” while Garlinghouse said he was “in favor of” adjustment but was “marginally inclined to be more aggressive” when they did this.
Getting XRP listed
The complaint also discusses CEO Galinghouse’s efforts to list XRP on cryptocurrency exchanges in America and abroad. These efforts included “an incentive program” with “minimum monthly guarantees.” A part of the complaint reads:
In December 2016, Garlinghouse again sought to get XRP listed on Platform A. In a December 1, 2016 email, he stated that Ripple’s 2017 “incentive program” for exchanges, along with Ripple’s efforts to increase institutional adoption of XRP for settlement, would “enhance the opportunity for [Platform A’s] traders” and that Ripple was “happy to offer minimum monthly guarantees in 2017 to get this onto your near term priorities list.”
In a separate email to an unnamed cryptocurrency trading platform, Garlinghouse voiced concerns about exchanges hesitating to list XRP due to concerns about whether the cryptocurrency could be classified as a security, stating that it could “hurt” Ripple.
Larsen also played a significant role in getting XRP listed on exchanges even after retiring from his position as Ripple’s chief executive. When XRP was rejected by an unnamed derivatives exchange due to legal uncertainty, Larsen expressed his frustration to Garlinghouse:
Larsen forwarded this response, noting: “What a pain these guys are.” Garlinghouse, in turn, replied by asking Ripple Agent-1 to keep both him and Larsen “updated on this topic.
Ripple fires back
As previously reported by The Daily Chain, Ripple had responded to the SEC’s complaint last month and even filed for a Freedom of Information Act request for documents from the SEC that states how the agency determined that bitcoin and ether, are not securities.