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SEC v. Ripple angers XRP holders as rival Stellar (XLM) mixed in “love triangle”


“Although the SEC claims that all XRP are unregistered securities and Brad Garlinghouse and Chris Larsen unjustly enriched themselves, it allows Ripple Co-founder JedMcCaleb to sell his XRP for hundreds of millions of dollars to possibly buy MoneyGram. Makes perfect sense”, said XRP Holders’ attorney John Denton ironically.

MoneyGram is likely to be at the center stage of the Ripple v. Stellar rivalry while Jed McCaleb, the Ripple co-founder who left the firm in 2013 to start Stellar, continues to sell millions of XRP despite the ongoing SEC v. Ripple lawsuit.

Ripple bought a 9% stake in MoneyGram in 2019, worth $30 million, in a deal that allowed the payments services provider to use the blockchain’s firm technology for cross-border payment and foreign exchange settlement.

Everything changed on December 22, 2020. The Securities and Exchange Commission charged Ripple with conducting a $1.3 billion unregistered securities offering for selling XRP to investors over the years.

Ripple Labs has decided to take the legal challenge head-on and expose the lack of regulatory clarity within the digital asset space after dozens of complaints filed by the SEC against blockchain firms.

Ripple gains higher ground for XRP, SEC plagued with top-level infighting

Two days after the SEC complaint, MoneyGram distanced itself from Ripple and claimed the firm wasn’t using the XRP Ledger via RippleNet and On-Demand Liquidity (ODL).

In March 2021, Ripple CEO Brad Garlinghouse said the partnership with MoneyGram would be revisited in the future but Ripple rival Stellar is reportedly mulling over acquiring the money transfer company.

This has led top figures within the XRP community to lash out, namely XRP Holders’ attorney John Deaton, who “facepalmed” on Twitter as he narrated the story step by step:

“In 2018, Ripple acquired a 9% stake in MoneyGram. The SEC allowed this purchase knowing that XRP would be distributed to MoneyGram and that MoneyGram would not hodl the XRP, but sell it in the secondary market on exchanges to individual investors.

“The SEC sues Ripple and claims that all XRP, including XRP sold in the secondary market by MoneyGram on exchanges like Coinbase to individual investors, were always unregistered securities. The SEC claims it filed the suit to protect individual investors from buying XRP.

“Although the SEC claims that all XRP are unregistered securities and Brad Garlinghouse and Chris Larsen unjustly enriched themselves, it allows Ripple Co-founder JedMcCaleb to sell his XRP for hundreds of millions of dollars to possibly buy MoneyGram. Makes perfect sense”, he tweeted.

Jed McCaleb received 8 billion XRP tokens for his role co-founder and CTO in the development of the OpenCoin company, which has since been rebranded to Ripple Labs.

McCaleb and Ripple reached an agreement in which he could sell 1.5% of XRP’s daily volume per day. In 2020, McCaleb sold a whopping $400 million worth of XRP and has sold almost 2.4 billion XRP so far this year, which may have been worth approximately $1.95 billion.

The SEC has made no public statement regarding Jed McCaleb’s XRP activity despite the ongoing SEC v. Ripple lawsuit, which had XRP being delisted by crypto exchanges in the United States, crippling the market.

In the meantime, Ripple and the individual defendants have struck lucky with two top SEC officials admitting to the overwhelming lack of clarity within the crypto space. This was a “gift from the heavens” as attorney Jeremy Hogan put it.

The bombshell from the SEC Commissioners could well save Ripple’s case as it aims to win on the Fair Notice defense, claiming the SEC hasn’t provide proper fair notice that selling XRP could be deemed as a security. The agency claims XRP is a security due to its centralized nature but Ripple always claimed it never held an ICO.

Also in the spotlight will be Ethereum (ETH) as the deposition of ex-SEC Director William Hinman will go forward next week. Not only the markets could make moves in reaction to his answers, but ETH could eventually be targeted by the SEC given the nature of its past fundraiser.

We have recently spoken to Natalia Zakharova, Head of Sales at FX and CFD broker FXOpen, about the lawsuit. As to whether XRP is a security: “As a broker offering CFD trading, we can say that it doesn’t really matter to us if XRP is a security or not.”

“XRP is a convertible digital currency, in other words, a measure of value. This was established back in 2015 when Ripple Labs and Department of Justice reached the settlement obliging Ripple to comply with US currency laws, as opposed to securities laws”, she said in the interview.

Natalia Zakharova then said XRP holders do not benefit directly from the performance of Ripple Labs and the market value of…



Read More: SEC v. Ripple angers XRP holders as rival Stellar (XLM) mixed in “love triangle”

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