SEC, Securities and Exchange Commission, is an independent federal institution of the United States of America’s federal government created in June of 1934 in the wake of the collapse of Wall Street that took place in 1929. The agency’s main objective is to enforce law against market manipulation by shady traders. The institution however has a department that develops and releases APIs, Application Programming Interfaces, to combine financial statement data for the purpose of faster and easier disclosure of transactions and assets by corporates. These APIs also serve the function of supporting third-party services and developers in their quest to develop applications that service direct retail investors and their investments.
XRP on the other hand, also known as ripple, is a DeFi, Decentralized Finance, project that has managed to draw support from huge global financial actors like Santander and Bank of England. Despite this fact, SEC has brought a law suit against Ripple challenging its validity as a decentralized crypto platform and this could imply several ramifications to Web3 that could change the very meaning of the term decentralized.
This is because if the agency wins, it could mean introduction of new regulations to govern the crypto industry .
The company’s CEO, Brad Garlinghouse, has warned that the verdict could affect the entire sector because it could lead to the closure of many projects in the world of cryptocurrency. The CEO also claimed that the country, USA, is suffocating cryptocurrencies since it does not offer prime conditions for cryptocurrency growth.
Mr. Garlinghouse also expressed his concerns on SEC going after Crypto projects while terming the approach as an unhealthy way of trying to regulate the sector.
With the federal agency going after Ripple(XRP), the company has seen its prices drop by 8% in the last month. Its trading price has also taken a dip for the worst since it has lost a whooping 90.47% value in reference to its all-time high.
The agency is gearing towards cracking a whip on rogue investors in cryptocurrencies and has made its intentions clear by expanding its cyber unit and renaming it The Crypto Assets and Cyber Unit in the last year. The regulator also had plans to set up 2 new offices to deal with crypto assets and related sectors.
As the situation continues to develop, Investors and stakeholders are eagerly waiting for the verdict. With more governments meddling in the crypto industry to assert control and dominance, it is a wait and see situation to determine how the crypto world copes and reshapes.
