Wait for the smoke to clear – and then go public. To that end, as reported this week, crypto firm Ripple might be headed to the public markets, if and when it settles its suit with the Securities and Exchange Commission (SEC).
The news seemingly comes secondhand – or at least a few times removed from what might be termed the “original source.” As reported, SBI Group CEO Yoshitaka Kitao has said that Ripple execs are looking to go public (SBI is an investor in Ripple).
As for the suit itself, filed in December, the SEC has sued Ripple regarding its XRP cryptocurrency, with the key charge that the company held an unregistered securities offering to the tune of $1.3 billion. At issue is an existential question: Is XRP a security – or is it a currency? The SEC says the former, the company says the latter.
Legal Road Ahead?
There may be a long road before the way is paved for a listing, however. As reported by Forkast, with an update on the legal wrangling, CEO Brad Garlinghouse and Executive Chairman Chris Larsen have asked a judge to move the U.S. SEC to produce “relevant internal documents” on bitcoin, Ether and XRP – and to stop the SEC from requesting information on XRP from foreign regulators.
“The SEC’s efforts represent an end-run around the discovery rules, allowing it to conduct discovery beyond the Court’s purview and upsetting the level playing field that the federal rules strive to create,” the Ripple execs’ attorneys wrote. “Due to the breadth of such requests, and the involvement of foreign regulators, defendants are also concerned about chilling Ripple’s business activities.”
At the same time, Ripple wants access to the SEC’s internal documents, which might illuminate the way the commission has been viewing cryptos in general and XRP in particular. Should those documents be produced, and if they show some ambivalence over whether XRP and brethren are securities, that may open the door for the contention that XRP could be used as a currency, or in traditionally defined transactions.
Discovery is slated to last until July, according to reports. And should things proceed to trial, that might drag out the end of that chapter, and an eventual listing. In the meantime, other crypto plays, like Coinbase, have been going public without the comparable legal questions. Should XRP be given the “currency” designation, it’s likely that its value would soar (as it would, presumably, find wider and official berth within commerce), which would stoke enthusiasm for a Ripple listing. But if the space gets crowded with a slew of public crypto-focused listings, investor fatigue could set in. Timing is everything, as they say.
Much hangs in the balance amid the marbled courtroom halls.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More