SEC Investigates Early XRP Sales109
The Securities and Exchange Commission (SEC) is investigating the early sales of XRP, the cryptocurrency created by Ripple Labs Inc., according to people familiar with the matter.
The SEC is looking into whether Ripple sold XRP as an unregistered security, the people said, asking not to be identified because the inquiry is private. The agency’s probe is in early stages and could lead to an enforcement action against the company, the people said.
An SEC spokesman declined to comment. Ripple didn’t immediately respond to a request for comment.
The SEC’s investigation comes as regulators around the world are taking a closer look at the cryptocurrency market. The agency has already brought several enforcement actions against companies that sold digital tokens, alleging that they violated securities laws.
In 2017, the SEC brought an enforcement action against the founders of Centra Tech Inc., a company that sold a digital token called Centra. The SEC alleged that the founders misled investors about the company’s products and services and that they sold Centra tokens as an unregistered security.
In 2018, the SEC brought an enforcement action against Paragon Coin Inc., a company that sold a digital token called ParagonCoin. The SEC alleged that the company misled investors about the use of proceeds from the token sale and that it sold ParagonCoin as an unregistered security.
The SEC’s investigation of Ripple is a sign that the agency is continuing to scrutinize the cryptocurrency market. The agency has brought several enforcement actions against companies that sold digital tokens, and it is likely that it will continue to bring such actions in the future.
Companies that are considering selling digital tokens should be aware of the SEC’s enforcement actions and should take steps to comply with securities laws. Failure to comply with securities laws could lead to an enforcement action against the company and its executives.
2024-11-23
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