Acting SEC Enforcer Leading Ripple Lawsuit to Step Down; XRP Fights to Stay on Exchanges
Marc Berger, the SEC’s Acting Enforcement Director, will leave the agency at the end of January. The policymaker will be remembered for leading the SEC’s potentially damaging fight against Ripple Labs and XRP.
The Securities and Exchange Commission (SEC) is undergoing a significant shakeup as it adjusts to the incoming Biden administration. Marc P. Berger, the agency’s Acting Enforcement Director, has announced his exit in the latest change.
SEC Shakeups Continue
Berger has held the position of Deputy Director of Enforcement at the SEC since August 2020.
A press release published earlier this week confirmed that he would leave his position before the end of the month. He is the second high-profile exit from the SEC, following former agency Chairman Jay Clayton, who resigned last month.
While Berger’s time in his position was short, he notably spearheaded the SEC’s legal action against Telegram and more recently, against Ripple Labs.
The suit filed last month alleged that the company engaged in an unregistered securities offering by conducting an Initial Coin Offering (ICO) for its XRP token in 2013.
The SEC also alleged that Brad Garlinghouse and Chris Larsen, Ripple Labs’ CEO and co-founder, respectively, had failed to report personal XRP token sales amounting to over $600 million.
A Fight for XRP’s Existence
Many people have criticized Ripple for its handling of XRP. These have led to suits, which the company has largely fended off over the years.
However, the SEC suit threatens much more than just XRP’s market value. Success with the lawsuit will mean XRP will now be classified as a security. This is a problem that could be detrimental to the growth of the sector
As Garlinghouse explained, this could set a precedent and embolden the financial regulator to come after other cryptocurrencies.
Garlinghouse’s post appeared to be a rallying cry for the entire industry to band together and fight a common enemy. The CEO's strategy to form an army of crypto heavyweights has so far fallen on deaf ears.
In fact, most platforms are trying to distance themselves away from Ripple. Some of the largest crypto exchanges have cut ties with XRP, either suspending trading activities or delisting the asset altogether.
Some of these exchanges include Bittrex, Coinbase, and Blockchain.com. Grayscale Investments and Bitwise Asset Management, two of the crypto industry’s largest investment management companies, have also divested their portfolios of any XRP holdings.
Yesterday, Gavin Michael, the CEO of crypto investment firm Bakkt, told Axios that the company wasn’t looking to step into the XRP market anytime soon.
The firm, which began its crypto journey with Bitcoin, is reportedly looking to launch support for several altcoins as part of a major expansion in 2020. However, as Michael told the news source, they don’t plan to incorporate XRP.
Ripple appears to be standing alone in this fight, with the asset becoming a pariah in the crypto space.
The Southern District of New York has ruled that the company’s attorneys will meet those of the SEC in a pretrial for the case on February 22. On that day, Ripple Labs will enter what is perhaps the crypto industry’s most pivotal legal battle.