Blockchain Company Ripple which is linked to cryptocurrency XRP has been blocked by United States markets regulator Securities and Exchange Commission (SEC) from conducting any unregistered securities offering.
Ripple has also been charged with carrying out a $1.3 billion unregistered securities offering. Additionally, SEC also charged two top ranking officials from Ripple for the personal gains each received from the unregulated offering.
In its response on the matter, Ripple said XRP is a currency and therefore it doesn’t need to be regulated as an investment contract. “The SEC is fundamentally wrong as a matter of law and fact,” said Ripple.
All across the world financial regulators are facing a hurdle on how they should regulate blockchain companies like Bitcoin, XRP, Ethereum and other cryptocurrencies. Many regulators are finding it hard to categorize cryptocurrencies as a niche or a mainstream asset.
“Issuers seeking the benefits of a public offering, including access to retail investors, broad distribution and a secondary trading market, must comply with the federal securities laws that require registration of offerings unless an exemption from registration applies,” said SEC nforcement director, Stephanie Avakian.