According to Fortune Magazine, Ripple CEO Brad Garlinghouse has said that he was expecting the Securities and Exchange Commission (SEC) to sue his company for allegedly selling unlicensed securities in the form of XRP tokens. He expects the Commission to name him and co-founder Chris Larsen as co-defendants in a lawsuit, which he expects to come sooner than later.
Following the news, XRP, which is currently the third-largest cryptocurrency by market cap has dropped by more than 17% in the last 24 hours. Meanwhile, its market cap has dropped to around $21 billion, with a price of less than 50 cents.
Garlinghouse also told the Wall Street Journal that a representative from the Commission notified his company late Monday that they would be filing a lawsuit in federal district court soon. But while the Commission is yet to make any comments on the matter, Ripple is gearing up for a battle.
In a prepared statement, Garlinghouse noted that Ripple intends to fight back:
The SEC is fundamentally wrong as a matter of law and fact. XRP is a currency, and does not have to be registered as an investment contract. In fact, the Justice Department and the Treasury’s FinCEN already determined that XRP is a virtual currency in 2015 and other G20 regulators have done the same. No other country has classified XRP as a security.
The CEO has also taken an unusual step of posting the concerns on Twitter as though to attract public sympathy.
But while the scuffle is on-going, the company will be seeking a new headquarters outside of the United States, a recent claim revealed.