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In sharp contrast to the rest of the crypto market making a sizeable recovery, XRP lost value as the SEC enforcer behind Ripple Labs’ $1.3 billion lawsuit announced his departure.
By GREG THOMSON - COINTELEGRAPH
The XRP price remained relatively unmoved on Thursday, Jan. 14, even as the broader cryptocurrency market ignited a recovery that saw over $150 billion flood back into the global market cap.
Earlier this week the United States Securities and Exchange Commission announced the impending departure of Marc P. Berger, the commission’s Acting Director of the Division of Enforcement. The outgoing director was in office for the commencement of the SEC's $1.3 billion lawsuit against Ripple Labs.
Berger leaves his position at the end of the month after just five months in the post. He had previously led the New York Regional Office as director since 2017, before being appointed to the enforcement division in August 2020.
The official announcement posted to the SEC website on Jan. 12 notes the departing director oversaw enforcement actions against numerous companies and corporate entities relating to a plethora of financial crimes and misconduct.
These include Telegram Group Inc, which was ordered to pay back over $1.2 billion to investors following what was deemed to be an illegal token sale. Berger was in office for the commencement of the recent Ripple lawsuit saga, where the CEOs of Ripple Labs are accused of holding an unregistered $1.3 billion securities offering. The case will continue in Berger’s absence, with a pretrial date set for February.
Berger also brought actions against JP Morgan and Robinhood for market misconduct, as well as Deutsche Bank AG, Herbalife and Stryker Corp for violations of the Foreign Corrupt Practices Act.
Following XRP’s 76% price collapse throughout December 2020, the coin managed to claw back 68% of its value, but the coin’s current valuation of $0.29 remains some way off a recent November high of $0.78.
The coin price remained relatively stable on Thursday despite the general direction taken by the rest of the market. The current XRP price of $0.295150 is 1.3% lower than that recorded 24 hours earlier and leaves XRP with a market cap in the region of $13 billion.
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Grayscale Investments is dissolving the Grayscale XRP Trust in light of the U.S. Securities and Exchange Commission’s lawsuit against Ripple.
Grayscale, which is the largest digital currency asset manager in the world, says it will liquidate the product and distribute the money to its shareholders.
“In response to the SEC’s action, certain significant market participants have announced measures, including the delisting of XRP from major digital asset trading platforms, resulting in the Sponsor’s conclusion that it is likely to be increasingly difficult for U.S. investors, including the Trust, to convert XRP into U.S. dollars, and therefore continue the Trust’s operations.”
Grayscale removed XRP from the Grayscale Digital Large Cap Fund last week.
The SEC’s lawsuit accuses Ripple, its chief executive officer Bradley Garlinghouse and co-founder Christian Larsen of raising over $1.3 billion by selling XRP in an unregistered digital securities offering.
In the wake of the lawsuit, at least 27 cryptocurrency organizations have now dropped support for XRP.
Ripple general counsel Stuart Alderoty tells his Twitter following that the company will file its initial response to the SEC’s allegations in a matter of weeks.
Garlinghouse says the company is looking forward to its day in court and to a change in leadership at the SEC.
“We’re on the right side of the facts and of history, and look forward to our day in court – as well as engaging with the new SEC leadership once appointed.”
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