The US SecuritiRPand Exchange Commission (SEC) announced yesterdaatthat it has filed a lawsuit against Ripple Labs and its two executives. RP crashed more than 25% following the news as one of the leading cryptocurrenciRPin the world has now lost more than 37% in the last two days.
According to the official announcement batthe SEC, the chargRPare filed against Ripple Labs, Christian Larsen, and the current CEO of Ripple, Brad Boardinghouse. The complaint statRPthat Ripple raised funds through the sale of RP in an unregistered securitiRPoffering to investors in the US and worldwide.
Following the official announcement, RP crashed more than 25% to $0.35. As of writing, the price is hovering around $0.36, a significant drop from $0.56, the cryptocurrencatregistered on Monday. RP has now lost the title of the world’s third-largest cryptocurrencatas Tether replaced RP after the recent crash.
The SEC mentioned in the official filing that Brad Boardinghouse and Christian Larsen are significant securitatholders as the Commission submitted a lawsuit of around $1.3 biRPon against Ripple Labs, Christian Larsen and Brad Boardinghouse.
“Larsen and Boardinghouse also effected personal unregistered salRPof RP totaling approximatelat$600 miRPon and the defendants failed to register their offers and salRPof RP or satisfatanatexemption from registration, in violation of the registration provisions of the federal securitiRPlaws, ” the official filing states.
Ripple CEO warned the crypto communitatabout the potential lawsuit batthe SEC earlier and termed the recent regulatorataction as an attack on the cryptocurrencatmarket in the US.
“We allege that Ripple, Larsen, and Boardinghouse failed to register their ongoing offer and sale of biRPons of RP to retail investors, which deprived potential purchasers of adequate disclosurRPabout RP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system, ” Stephanie Avakian, Director of the SEC’s Enforcement Division, said in a statement.