Ethereum co-founder Vitalik Buterin has lashed out at Ripple following their attempt at justifying why XRP should not be considered a security.
In response to Ripple having to face another U.S. Security and Exchange Commission (SEC) lawsuit over their XRP cryptocurrency, the company has criticized Bitcoin and Ethereum, labeling them as “Chinese-controlled.”
Buterin was less than pleased with this attack on the two largest decentralized digital assets on the planet, stating that the Ripple team is “sinking to new levels of strangeness.”
Looks like the Ripple/XRP team is sinking to new levels of strangeness. They're claiming that their shitcoin should not be called a security for *public policy reasons*, namely because Bitcoin and Ethereum are "Chinese-controlled". 😂😂https://t.co/ts02JqrTrB pic.twitter.com/mKwEzGIetk
— vitalik.eth (@VitalikButerin) December 22, 2020
The irony of Ripple’s decentralization claims was not lost on industry observers such as Evan Van Ness, who quipped;
“But the really hilarious part was Ripple claiming they’re less centralized.
‘We can’t be chinese controlled because we’re 100% centralized in America’.”
The tweet generated the usual level of gutter crypto tribalism that we have come to expect over the years following the explosion of competing blockchains.
XRP Under SEC Scrutiny
The agency is claiming the San Francisco-based fintech firm violated investor protection laws when it sold the digital asset, according to the Wall Street Journal.
The suit, which hasn’t been filed yet, would be one of the highest-profile SEC actions against a cryptocurrency company. It has already filed and won a number of lawsuits claiming that startups violated securities laws when they raised money by selling crypto tokens.
Ripple CEO Brad Garlinghouse went on the warpath, claiming that the SEC is favoring Bitcoin and Ethereum over his company’s own token, stating;
“The SEC – out of step with other G20 countries & the rest of the US govt – should not be able to cherry-pick what innovation looks like (especially when their decision directly benefits China).”
Today, the SEC voted to attack crypto. Chairman Jay Clayton – in his final act – is picking winners and trying to limit US innovation in the crypto industry to BTC and ETH. (1/3) https://t.co/r9bgT9Pcuu
— Brad Garlinghouse (@bgarlinghouse) December 22, 2020
The WSJ report confirms the glaring differences, however, in that Bitcoin was an open software project launched by a pseudonymous creator calling himself Satoshi Nakamoto, whereas XRP was created, sold initially, and backed by the company Ripple. It added that Ripple has turned control of XRP development over to an open-source network of independent developers, but noted;
“But the company still holds about 6.4 billion XRP directly and has an additional 48 billion held in an escrow from which it periodically sells them to the public.”
XRP Price Reaction
XRP prices have dumped 17.5% over the past 24 hours in reaction to the news. The cross-border payments token was trading at $0.463015 at the time of writing.
XRP is down 35% from its 2020 high of $0.73, which came on November 25, and a whopping 86% from its all-time high of over $3 in January 2018.
Should the SEC win the suit, XRP prices are likely to plummet even further.
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