XRP investors have filed a petition against the SEC citing irreparable harm.
The petitioners believe the SEC is not looking out for the best interests of investors by declaring XRP to be a security.
The value of XRP has fallen by more than 50% since the SEC brought charges against Ripple Labs and two of its executives.
For almost every common cryptocurrency available in the market, 2020 has been a big year. For the most part, 2021 looks very promising, but XRP is not.
The Securities and Exchange Commission (SEC) has officially tasked Ripple Labs and two of its executives with selling more than $ 1 billion in unregistered securities. Today, former investors are suing the SEC in turn. It appears that XRP holders do not approve of the token being labeled as a security by the SEC and therefore are suing the government for the harm caused to them by these charges.
What does their legal action involve?
XRP investors who filed the petition say the SEC is not doing its best to protect U.S. investors . These investors argue in the first bullet that stating that XRP is a security is in fact serving the interests of investors. This result is the opposite of what the SEC claims to do.
In its second point, the petition states:
As chairman of the SEC, it was Jay Clayton (Clayton’s) fiduciary duty to uphold the SEC’s mission statement. Instead of protecting investors and sharing information to help them make informed decisions, the defendant knowingly and intentionally caused losses of billions of dollars to innocent investors who bought, traded, received and / or acquired the XRP digital asset, including named plaintiffs, and all others in a similar situation.
Complainants say the SEC has had nearly seven years to make an official statement or work with Ripple Lab and its executives. This delay, they say, was more than enough time for the government to act. In their eyes, it is unfair that the SEC is making these accusations now. Worse yet, this action cost investors billions of dollars in “unnecessary” losses.
The petition also claims that Jay Clayton, the head of the SEC, acted for improper motives and subjected Ripple Labs and XRP to irreparable harm. They point out that the SEC considers Bitcoin and Ether not to be securities, and argue that the same is true for XRP. They thus believe that the SEC should consider the third largest cryptocurrency in terms of market capitalization (now fourth according to Coin Gecko, a cryptocurrency market capitalization aggregator) as not being a security. In addition, they cite the use of XRP as „currency“ with over 150 applications and commercial consumption.
What is XRP?
XRP is the cryptocurrency created by Ripple, an enterprise blockchain platform intended to facilitate payments and fund transfers. The Ripple network claims to be able to conduct international transactions instantly for a fraction of the cost of the traditional money transfer system.
Until recently, Ripple has partnered with many banks. XRP was listed on almost every cryptocurrency exchange before the charges were brought against Ripple. Following this announcement, many partners and exchanges suspended their services until everything was legally settled with Ripple.