Many cryptocurrencies can be removed from exchanges, and blockchain companies can find problems with the American authorities. This is all due to the SEC-Ripple litigation that began last week and led to a weakening of XRP by 40%
Companies have continued to refuse to work with the XRP token issued by blockchain startup Ripple. The latest was the Swiss provider of cryptocurrency exchange products 21Shares. He removed the coin from the list of supported products. Yesterday, December 27, altcoin trading was stopped by the B2C2 trading platform, The Block reports.
Previously, XRP support was discontinued by the OSL, Beaxy and CrossTower exchanges, as well as the Bitwise Asset Management cryptocurrency fund and the Galaxy Digital investment company. The reason was the claim of the US Securities and Exchange Commission (SEC) against Ripple. The company and its managers are accused of illegally selling securities worth $ 1.3 billion under the guise of their own cryptocurrency. After that, the XRP rate fell from $ 0.52 to the current value of $ 0.29, at the moment dropping to $ 0.22.
Antonina Levashenko, a teacher at the Moscow Digital School, admitted that the SEC can make claims to almost all ICO projects that raised funds from private investors without registering in it. The agency uses the Howey test to recognize an asset as a security. On its basis, all ICOs can be recognized as investment projects, the expert believes. She warned that companies such as Tether, the issuer of the USDT token, and Tron, the issuer of TRX, and other tokens could be next for the SEC.
A similar point of view is shared by Yuri Brisov, member of the Commission for Legal Support of the Digital Economy of the Moscow branch of the Russian Bar Association. In his opinion, all tokens, in the ICO or a similar investment model of which American citizens or companies participated, may be sued by the SEC. So far, only Bitcoin has defended the right to be a cryptocurrency, the expert emphasized.
“The Commission (SEC) took over the cryptoindustry, as it did with many dotcom companies that were traded on the exchange. According to the SEC's position, almost any cryptocurrency for the creation of which investors' funds are attracted fail the Howey test. Consequently, it is not only a means of payment, but also an investment contract. So, any operating crypto start-up that raised funds through ICO is at risk of falling out of favor with the SEC, "Brisov said.
Similar concerns were voiced by Mikhail Karkhalev, financial analyst at Currency.com crypto exchange. He believes that potentially absolutely any project since the ICO can attract the attention of the SEC, and most likely there will be "more than a dozen" similar cases.
“I am sure that more than a dozen projects will fall under the distribution. During the ICO boom, money attracted thousands of projects, 99% of which turned out to be the most common fraud. This includes fictitious crypto projects that allegedly created something promised, but they did not succeed, as a result of which they had to close or stop activities without returning funds to investors, "said Karkhalev.
In order not to lose funds and get rid of the project's tokens, which may fall under the SEC lawsuit, Karkhalev propose to follow the American exchange Coinbase. Earlier, she presented a plan for an IPO. The commission will definitely check the coins available on the platform, the expert is sure. This is necessary in order not to allow the company to go through the IPO procedure, which allows investors to invest in any "toxic" assets.
“If regulators demand to split XRP and any other tokens or cryptocurrencies from Coinbase, then this is already a bell that should be heeded. This is an unequivocal hint that these projects are already in the regulator's field of vision, which means that they will soon come to their liking, ”the expert advised.
EXANTE analyst Viktor Argonov recalled that the Ripple case continues the trend of the SEC's attack on cryptocurrencies. Earlier, similar claims from the department led to the closure of Pavel Durov's blockchain startup TON. The US government also tried to recognize the Libra cryptocurrency, which is being developed by Facebook, as a security. The stablecoin USDT could be next, summed up Argonov.