Ripple’s legal battle with the U.S. Securities and Exchange Commission (SEC) could soon be coming to an end, and that could mean good news for the cryptocurrency company’s plans to go public.
In an interview with CNBC, Ripple (XRP) CEO Brad Garlinghouse said that the company is exploring the possibility of an initial public offering (IPO) once its lawsuit with the SEC has been resolved.
Ripple has been facing off against the SEC in court since December 2020, when the regulator filed a lawsuit alleging that the blockchain-based payments network had sold unregistered securities through its XRP token. Ripple has argued that the digital coin is a currency, not a security, and should be regulated as such.
The SEC has yet to make a determination on whether XRP is a security. If it were to be classified as a security, it would be subject to the SEC’s rules and regulations. This would likely require Ripple to register with the SEC and disclose its financials. It would also likely subject XRP to greater scrutiny from financial regulators.
If Ripple is successful in defeating the SEC’s case, it could clear the way for the company to pursue an IPO in the near future.
“I think we want to get certainty and clarity in the United States with the U.S. SEC. You know, I’m hopeful that the SEC will not slow that process down any more than they already have,” Garlinghouse told CNBC during the World Economic Forum in Davos.
“But you know, we certainly are at a point in scale, where that is a possibility. And we’ll look at that once we’re past this lawsuit with the SEC.”
Garlinghouse’s comments come as cryptocurrency prices have taken a beating in recent weeks. XRP is down 42% in the last 30 days, while Bitcoin has lost 26% of its value over the same period.
Other digital currencies have fared even worse, with Ethereum down 34% and Terra’s LUNA down 99%. The sell-off has wiped billions of dollars off of the market, and sent crypto-related stocks such as Coinbase (NASDAQ:COIN) and Robinhood (NASDAQ:HOOD) tanking by 74% and 49% YTD, respectively.
The price crash is a brutal reminder of the volatility of the cryptocurrency market, and underscores the risks that investors face when buying into digital assets.
Despite the current market conditions, Garlinghouse said that the business is still growing. He noted that in the first quarter of 2020, the volume for Ripple’s on-demand liquidity service, a cross-border payments product that leverages XRP as a bridge between two fiat currencies, totaled $8 billion, compared to $1 billion in the same period last year. This significant increase in usage demonstrates that Ripple is continuing to gain traction with both financial institutions and customers alike. With its superior technology and growing adoption, there is no doubt that Ripple will continue to be a major player in the payments industry.
“Our growth is almost all outside the United States. I think that’ll probably persist until we get the clarity and certainty in the U.S. we’ve been seeking,” Garlinghouse said.
As of press time, the $20 billion market cap altcoin is changing hands at $0.4043, down about 0.20% intraday.
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