Crypto Firm Ripple Will Explore IPO After SEC Lawsuit Ends

Key Takeaways:

  • During the World Economic Forum in Davos, Ripple Labs CEO Brad Garlinghouse stated that the business will consider an IPO if the lawsuit with the Securities and Exchange Commission is resolved.
  • The SEC’s case against Ripple Labs has been ongoing for more than a year. It may be over by the end of 2022, according to Ripple Labs. According to Ripple’s CEO, once that happens, the company will seriously consider an IPO.
  • Garlinghouse seeks certainty and clarity regarding the regulator in the United States. Overall, he has constantly been calling on the U.S. implementing suitable rules for the blockchain and cryptocurrency realms.

After the US Securities and Exchange Commission (SEC) case is resolved, Ripple will contemplate an IPO. CEO Brad Garlinghouse announced this at the World Economic Forum in Davos.

To allow cross-border payments, the company employs XRP, the world’s sixth-largest cryptocurrency. Fiat is effectively converted to XRP, lowering transaction costs and increasing transaction speed. The XRP is then exchanged for fiat currency.

“We are definitely at a point in our development where [going public] is a possibility.” And we’ll look into it as soon as the SEC complaint is completed,” Garlinghouse added.

According to the SEC, Ripple, Garlinghouse, and executive chairman Chris Larsen sold XRP in an illegal securities offering. Ripple has claimed that the digital coin should not be classified as a security, which would subject it to considerably more stringent regulatory oversight.

The Securities and Exchange Commission is concerned about Ripple’s ties to XRP, charging that the business and its officials sold $1.3 billion worth of the tokens in an unregistered securities offering. However, Ripple claims that XRP should not be classified as a security, which would subject it to far more regulatory scrutiny.

The dispute has been ongoing for nearly 15 months, with Ripple anticipating a resolution this year. After that, the company will consider going public.

Given the success of the On-Demand Liquidity (ODL) service, the total yearly volume of transactions on the RippleNet platform hit a record $15 billion by the end of 2021. The Asia-Pacific area has become “one of the main participants in the ODL dollar turnover,” according to the business.

Garlinghouse predicted $8 billion in revenue for the first quarter of 2022 and stated that the corporation continues to develop, primarily outside of the United States. National Australia Bank and Canadian Imperial Bank of Commerce, two of Australia’s and Canada’s largest financial institutions, started using RippleNet for international payments in March.

“I believe we want consistency and clarity from the SEC in the United States.” “I’m hopeful that the SEC will not stifle that process any further than they have already,” Garlinghouse told CNBC at the World Economic Forum in Davos.

“But, you know, we’re definitely at a scale where that’s a possibility.” And we’ll look into it once we’re done with the SEC litigation.”

Garlinghouse previously stated that the crypto business requires unambiguous regulation. Switzerland, Singapore, the United Kingdom, and Japan, he said, have more favourable regulatory frameworks for technological innovation development.

Despite the lawsuit situation, Garlinghouse claims that the company is expanding. He claimed that volume for its On-Demand Liquidity cross-border payments product, which employs XRP, totaled $8 billion in the first quarter of this year, compared to $1 billion in the same period last year.

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Aadrika Sharma

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