Crypto Showdown: SEC’s Lawsuit Against Ripple Labs Reaches Critical Juncture
On Dec. 12, 2020, the U.S. Securities and Exchange Commission brought what crypto followers consider one of the most consequential enforcement actions related to the sale of cryptocurrency since the industry’s inception. The lawsuit is against Ripple Labs, Inc., creator of the XRP token—which was at the time one of the top cryptocurrencies by market capitalization at $27 billion. By the end of the month in which the complaint was filed, Ripple’s market capitalization dropped to $16 billion. The SEC alleged in its complaint that Ripple and related defendants violated Sections 5(a) and 5(c) of the Securities Act of 1933 by engaging in the unlawful offer and sale of securities in exchange for cash and other consideration worth over $1.38 billion.