The impending lawsuit between the Securities and Exchange Commission (SEC) of the United States and Ripple is about to heat up as the financial regulator alleges that top executives of the crypto company were manipulating the price of the XRP token. According to the authorities, these executives were able to do this by controlling the supply of the asset to the industry depending on the market condition of the period.
In what is SEC’s first amended complaints against Ripple, the commission backed its earlier claim that the firm together with Christian Larsen and Brad Garlinghouse sold over 14 billion units of XRP for over $1 billion. The regulatory body also stated that these proceeds were used to fund the operation of the crypto company and also enrich the executives.
It was also alleged that Ripple had received legal advice as early as 2012 that its token could be a security but the firm chose to ignore the advice. The complaints went on to state that the executives were able to enrich themselves by up to $600 million through the sales of these unregistered securities.
Ripple Executives Were Manipulating Sales of XRP
According to the complaints, Ripple’s executives, Garlinghouse and Larsen, were manipulating the sale of the token through one of Ripple’s market makers. The commission cited one instance where Larsen directed the market maker to “keep [sales] paused for now ” and “[w]ait until [the] market had recovered from this mistake.”
Another instance was cited in 2016 where the executives had to adjust the net sales target of the asset while hoping that this would help to “stabilize and/or increase” a falling XRP value. It was further stated that they both agreed to reduce the rate of their token sales while Garlinghouse said that he was “marginally inclined to be more aggressive when we do this.”
As many of you have seen, the SEC filed an amended complaint today. The only legal claim remains: did certain distributions of XRP constitute an investment contract? Disappointing the SEC needed to try to “fix” their complaint after waiting years to bring it in the first place…
— Stuart Alderoty (@s_alderoty) February 18, 2021
Counsel for Ripple, Stuart Alderoty, stated that he was disappointed with the financial regulator for their inaction all these years before raising their case now.
