Wait till the smoke has cleared before going public. To that end, crypto startup Ripple, as reported earlier this week, may head to the public markets. This might happen when resolved lawsuit with the Securities and Exchange Commission (SEC) happens.
The information appears to be second hand – or at least a few steps distant from the original source. Actually, SBI Group CEO Yoshitaka Kitao stated that Ripple executives are considering going public (SBI is an investor in Ripple).
The SEC has sued Ripple over its XRP cryptocurrency. The business had an unregistered securities offering worth $1.3 billion, filed in December. An existential question is at stake: is XRP a security or a currency? According to the SEC, the former is true, but the corporation claims the latter.
However, a lengthy road waits ahead before the route paves for a listing. With an update on the legal fighting, CEO Brad Garlinghouse and Executive Chairman Chris Larsen asked a judge to transfer the U.S. The SEC has ordered to submit “relevant internal papers” on Bitcoin, Ether, and XRP. Also, they had to stop pursuing information on XRP from foreign regulators.
SEC’s Actions: An End-Run Around Discovery Regulations
The SEC’s actions, according to Ripple executives’ lawyers, are an end-run around the discovery regulations. This allowed the SEC to conduct discovery outside of the Court’s supervision and disturbing the level playing field that the federal rules designed to create.
Defendants are also concerned that the extent of such requests. The involvement of foreign regulators, may limit Ripple’s commercial activities, he noted.
At the same time, Ripple requests access to the SEC’s internal documents. This could provide light on the SEC’s position on cryptos in general and XRP in particular. If such documents made public indicate some doubt regarding whether XRP and its brethren are securities, possibilities to argue that XRP can be used as a currency or in traditionally defined transactions may take place.
According to sources, Discovery will run until July. And if the case goes to trial, it could prolong the conclusion of that chapter and result in a listing. Meanwhile, other crypto companies, such as Coinbase, have gone public without facing similar legal issues.
Should XRP be designated as a currency, the value will likely rise, stoking interest in a Ripple listing. Investor fatigue could set in if the industry becomes congested with a series of public crypto-focused listings. As they say, timing is everything. In the marbled courthouse hallways, a lot is on the line.
