The SEC’s lawsuit against Ripple will take years, but the fintech company’s prospects are worse than in similar cases involving EOS or Kin token sales. This view was expressed by Adam Cochran, partner at Cinneamhain Ventures.
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If you are a casual observer and are a bit unclear why the $XRP case is worse for Ripple than cases against $EOS, $KIN and others were, here is a quick summary:
— Adam Cochran (@AdamScochran) December 23, 2020
In a series of tweets, he set out a number of factors supporting his conclusion:
- The company is registered in the United States and is fully subject to SEC jurisdiction;
- Unlike ICOs conducted by Block.one (EOS) and Kin (Kin), the SEC regards Ripple as continuing to violate the law by selling XRP tokens that the regulator has classified as unregistered securities;
- The Commission pointed to a centralized practice of selling XRP;
- The SEC added Ripple’s executives to the lawsuit, something it usually does in fraud cases.
“EOS was lucky with the settlement, the ambiguity of interpretation, and that it was no longer considered a security. The same goes for Kin. However, for projects like UnikoinGold, the blow proved fatal,” Cochran stressed.
The EOS project behind Block.one reached an agreement with the SEC last year to pay a $24 million penalty for securities-law violations in the United States. The regulator settled a similar suit with the Kik Messenger developer, imposing a $5 million penalty.
The Unikrn project, in addition to paying $6.1 million, agreed to lock UnikoinGold (UKG) tokens and delist them from all exchanges. The penalty amounted to almost all of the startup’s funds.
On December 22, the SEC filed a lawsuit against Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen, accusing them of violating securities laws.
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