Former SEC Chairman speaks out on XRP case
Joseph Grundfest, former chairman of the U.S. Securities and Exchange Commission (SEC), spoke about the XRP lawsuit filed against Ripple. Grundfest said innocent people could lose billions of dollars because of the incident.
The SEC announced it would file a lawsuit against Ripple this week for selling $ 1.3 billion worth of unregistered securities. XRP, which traded above $ 0.50 before this news broke, was down to $ 0.30 as of the morning of December 24. XRP’s market capitalization fell from $ 24 billion to $ 12 billion.
Joseph Grundfest, former chairman of the SEC, assessed these events in recent days and explained what negative consequences this may have.
What do XRP investors blame?
Joseph Grundfest sent a personal letter to SEC Chairman Jay Clayton on December 17, The Block reported. The former SEC chairman said in his letter that this position against Ripple would affect not only the company, but also innocent people. The price of XRP has fallen by 50% in the last 7 days.
Grundfest said some exchanges would delist XRP if the SEC announced it would sue Ripple. So far, more than three cryptocurrency exchanges; several different trading desks have decided to stop XRP transactions. Grundfest warned Clayton that this policy followed by the SEC would “harm innocent people who have invested money in XRP.”
This case is unprecedented
Another issue Grundfest is complaining about is that this is an unprecedented case. This uniqueness is not due to the content of the case, but to its timing.
In the United States, with Joe Biden winning the presidential election, there will also be changes to the SEC’s management staff. SEC Chairman Jay Clayton announced his resignation a few hours ago. Some of the names who worked with Clayton are also expected to leave the post. It is believed that Clayton’s final decision before he left was to sue Ripple.
Grundfest, who was appointed to the post by Ronald Reagan during his own term, said there was “no urgency” in filing a lawsuit against Ripple. His statements were as follows::
“I have never seen the Commission take such a decision, even though there is no obvious fraud or false publicity, and innocent people lose billions of dollars.”
XRP and Ethereum can be examined in the same category
The former SEC Chairman does not consider the definition of XRP as securities correct. According to him, XRP and Ethereum’s own coin, Ether, should be evaluated in the same category. This is because, under federal securities law, there is no sharp line between XRP and Ether.
According to his statement, whether the SEC considers XRP securities or not to touch Ether calls into question the Commission’s “fairness. Recalling that the SEC’s executive staff will change in the near future, the former chairman noted that new executives “may have different views” than the old ones.