Bitcoin Controlled By China, Ripple Tells SEC In Face Of Imminent Lawsuit
Ripple Labs Inc claimed - if the US Securities and Exchange Commission sees their token as an investment contract - the regulator would cede innovations in the cryptocurrency to China, which controls Bitcoin (BTC) and Ethereum (ETH).
What happened: "The Bitcoin and Ethereum blockchains are very vulnerable to Chinese control, as both are subject to a simple majority rule, while the XRPL prevents comparable centralization," said Ripple, the company behind the XRP token, in a statement to the SEC.
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Ethereum founder Vitalik Buterin was very responsive to Ripple, saying the company has sunk to "new levels of strangeness".
Why It Matters: The fintech company has vowed to defend itself in federal court against a pending SEC lawsuit against its CEO Brad Garlinghouse and co-founder Chris Larsen.
The lawsuit focuses on whether or not XRP is a security that should be registered with the regulator.
A former partner of Goldman Sachs Group Inc. (NYSE: GS) and founder of the financial services company Galaxy Digital, Michael Novogratz, noted on Twitter that BTC and ETH “appear to be SEC passport” while commenting on the upcoming XRP lawsuit .
Novogratz also found it strange that SEC chairman Jay Clayton "waited years for this".
The head of the SEC's corporate finance department, William Hinman, had stated in 2018 that BTC and ETH are not securities. At the time, Hinman had said that decentralization is the key to whether a currency is a security or not.
Price Action: Ripple was trading 18.21% lower at $ 0.46 at press time, while BTC was trading 5.27% lower at $ 22,652.19. ETH was trading 6.05% lower at $ 605.39. On Friday, the Grayscale Bitcoin Trust closed 4.58% higher at $ 30.83.
Related Link: ETH Cryptocurrency Up 2.7% As Grayscale Ethereum Trust Becomes SEC Reporting Firm
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