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Just yesterday, when everyone was waiting for foreigners to celebrate the New Year and causing the market to fall, XRP’s parent company Ripple was formally sued by the SEC. According to CoinGecko data, the currency price was around US$0.27 as of press time, a drop of 33.6% within 24 hours, and the global market value ranking dropped from third to fourth.
After this prosecution, we can see that the blockchain market is increasingly pursuing compliance development, and will gradually abandon more “air coins” and “altcoins” without any practical scenarios. Ripple’s The prosecution is only the beginning.
I think that next year’s turbulence in the cryptocurrency market will be the biggest in recent years, and it will also usher in a bull market for some currencies that have real practical scenarios.
Back to the prosecution, let us first look at the background of the SEC?
The Securities and Exchange Commission (Securities and Exchange Commission, abbreviated as SEC). According to the Securities Exchange Act of 1934, a special committee of the US Federal Government was established that year to supervise the implementation of securities regulations. The committee is composed of five members. The chairman is changed every five years and is appointed by the President of the United States.
The current chairman Jay Clayton will resign on December 23, Eastern Time, which is today. The details are not difficult to see a certain connection with Biden’s appointment.
The key point of the SEC’s prosecution is (because there are too many details, I will not list them here, and there are minor changes compared to the original text, but the original intention has not changed):
1. Since 2013, Ripple has continuously sold more than 14.6 billion XRP in exchange for cash or other consideration assets worth more than 1.38 billion U.S. dollars.
2. Ripple has never submitted a registration statement for XRP, and the two executives have the largest control of XRP. New XRP can only flow from them to the market.
3. The use of XRP is alleged in the document as the purpose of this move is to sell XRP to as many speculators as possible.
4. Ripple boasted that XRP might be used by some professional institutions in the future, but now there is a situation in which Ripple exchanges the currency to some partners and the partners resell it to the secondary market. In the process, nearly 600 million U.S. dollars went into the personal pockets of executives.
5. Ripple once admitted in private communications that the main reason people buy Ripple is to use it as an investment or speculation.
After SEX formally sued, SECRipple CEO Garlinghouse publicly responded that XRP is not a security. One of the reasons is that the market value of XRP is not related to Ripple’s activities, but is related to other cryptocurrency market conditions.
From the beginning of the issue, Garlinghouse publicly promised to make significant and meaningful efforts to XRP, which means that the value of XRP depends on the company Ripple.
Throughout the issuance process, Ripple has also made a lot of efforts to monitor, manage and influence the XRP trading market, including the trading price and volume of XRP. These efforts include:
(1) Use algorithms to determine the amount and price of XRP sold to the market;
(2) To pay rewards to certain market makers, if the sales reach a certain level of transaction volume of XRP;
(3) To cooperate with the good news, pull the plate synchronously.
On November 27th, I posted an article. The last time Ripple followed the NFT hotspot and soared to $0.7, I said: Judging from this operation, the official pull is obvious. Now less than a month, he is facing a major crisis.
According to CoinGecko data, there are currently 6072 digital currencies and 418 exchanges. It can be seen that there are many blockchain projects, but how many of them are truly valuable and completely decentralized?
I believe that the SEC’s lawsuit this time will not only be fined, but also that with the upcoming appointment of the new chairman, the fire during the Christmas period is set.
I predict that in the future, more institutions will intervene, and it may even form a consortium chain to set standards and gradually abandon these useless “virtual currencies.”