Guy, host of Coin Bureau channel, shared possible reasons why the US Securities and Exchange Commission (SEC) has started a lawsuit against Ripple.
Many other crypto projects are readily available according to the server Ripple (XRP) fits his profile pretty well, but the SEC may have targeted Ripple because it’s based in the US.
“The fact that Ripple is based in the US paves the way for easier tracking compared to many other major crypto projects. The thing is, the SEC also filed a surprise lawsuit against the Terra and Mirror protocol late last year. The SEC doesn’t seem to be leaving these projects alone, either. The SEC has also targeted some overseas crypto companies in the past.”
Those holding large amounts of XRP could also be blamed in the case, according to the analyst.
“The second possible reason is that Ripple has a lot of money and the SEC is trying to secure a big deal that will make good headlines and potentially be used to fund the expansion of its regulatory operations.”
If this were true, the SEC could have pursued many other projects with a similar approach to Ripple. It should also be remembered that they have only issued $2.4 billion in cryptocurrencies since 2013. According to the analyst, this penalty is actually quite small when considered in general.
A third possibility is that the SEC may need a precedent to go after other crypto projects.
“XRP is one of the largest cryptocurrencies in the market and it may be wanting to send a signal to the rest of the industry by disabling one of its major strengths. The thing is, the SEC just doesn’t have the resources to sue so many crypto projects.”
The fourth possible reason is the “SWIFT payment system alternative” created by Ripple.RippleNet threat”.
“RippleNet was adopted by financial institutions in certain regions very soon after its launch in 2019. Considering that the SEC likely first launched Ripple in mid-to-late 2020, this may have been in response to the threat. RippleNet may be seen as a threat rather than Ripple’s XRP sales. It may also explain why the SEC has waited so long to crack down on Ripple. Or it’s all just a coincidence.”
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.