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XRP First ICO to be Litigated

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Brian.rrr
@brian.rrr
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Hi Friends,

You may or may not have seen the news but the US Securities and Exchange Commision filed suit against Ripple (XRP) and its two principal executives.

Not good:

You can read the full complaint here:

https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf

Initial Coin Offerings (ICOs) have long been speculated to be on the fringes of legality as a true offering of securities requires much disclosure to the general public as well as registration of the securities. Technology moves faster than legislative review/rulings, so this clash of unregistered ICOs selling however much they want, to whoever they want, whenever they want with little/no information to the buyer was bound to happen. As the third largest digital asset, XRP will be the first to be litigated in court, which will likely set the precedent for others considering ICOs.

In the complaint, the SEC is also alleging the two XRP executives sold the coins and profited from the sales as there was no oversight - one of them personally pocketed over $600 million from the sales. The sales were largely done with hedge funds at a 30% discount to market value, so the hedge funds then turned around and dumped them on you and me as there were no sales restrictions like there would be with a registered investment product.

I invested in XRP in January 2018 at $2.10 per coin and ended up getting out at $2.02 per coin so my loss was only 4%, but the coin is only worth $0.43 today so I am glad I got out when I did.

Unfortunately, I am sure many of these ICO coins with no accountability over funds raised with unregistered coin sales will prove to be investment traps for retail bag holders like you and me, while the coin's executives and hedge fund friends being the ones who profited. Now it will be the lawyers who win as the SEC has requested a trial by jury in this case.

Never invest more than you can afford to lose!

What are your thoughts on the matter?

Thanks for coming by, Brian

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