The fintech company Ripple is likely to lose the US Securities and Exchange Commission (SEC) case. This assessment was made by GMT Legal managing partner Andrey Tugarin.
In his view, the SEC’s powers are such that the case is 99% likely to reach a court trial unfavourable to the project:
“Most likely, a substantial fine will be imposed on the project itself and on its founders personally,” Tugarin said in a ForkLog interview.
The lawyer called the proceedings “not a very good sign for the altcoins industry” and expressed confidence that similar lawsuits would continue:
“The SEC has already imposed fines and orders on giants like EOS and TON, and some comparatively small companies received real penalties and an obligation to return funds for conducting unregistered ICOs,” explained Andrey Tugarin.
Not surprised by the SEC’s lawsuit is Sergei Prilutsky, head of the research department at MixBytes.
“In principle, any token that was sold for money can be declared a ‘security’. It’s odd that the SEC hasn’t yet touched ‘gold’ in World Of Tanks or World Of Warcraft – there, unlike blockchain, you can hide what was sold,” he said.
The expert does not expect a favourable outcome for Ripple in the litigation:
“Any sale of a digital balance for fiat currency in anticipation of growth is an investment deal. Financial laws are simply outdated and do not keep pace with the digital world, where any digital asset that can be exchanged for other assets in seconds can be treated as an investment.”
According to Prilutsky, the regulator is not constrained in choosing targets for future similar lawsuits, as “they don’t care about the technology.”
Earlier, on December 23, the SEC filed a lawsuit against Ripple, the company’s CEO Brad Garlinghouse and co-founder Chris Larsen. The agency contends that over seven years the company sold unregistered securities in the form of tokens and raised $1.3 billion.
Commenting on the proceedings, Garlinghouse noted that the SEC lawsuit could spell trouble for other cryptocurrency companies and digital assets.
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