A leading cryptocurrency company, Ripple has not given up plans to launch an IPO despite the recent legal battle with the regulators in the US. The former chairman of SBI Group (Strategic Business Innovator Group, the group of financial services companies behind Ripple based in Tokyo, Japan) said that no regulatory framework yet exists for this market and there is no “focused regime” in place like traditional financial markets or securities markets.
The news is coming after it overtook the demand of the Stock Exchange Commission (SEC) which it is contending with. Garlinghouse suggested in January 2020 that Ripple will eventually enter the public stock exchange with an initial Public Offering (IPO).
Ripple’s CEO has stated that the important cryptocurrency company has no plans to postpone listing on stock exchanges in spite of the lawsuit with US regulators, according to SBI Group CEO.
Yoshitaka Kitao told The Telegraph that an IPO was the best way to clear the cloud that had been raised over its conduct. “I believe that the best way for Ripple to return to the spotlight is by issuing equity,” he said. “That way we can raise a lot of money quickly, which is useful for all the projects we are working on, to develop the infrastructure that enables global transactions.” Ripple announced its “Next Protocol” in October, an experimental second-layer network that aims to solve several of the problems with global payment networks.
Ripple CEO Brad Garlinghouse hinted at a possible IPO for Ripple last year, forecasting that IPOs will become more frequent in the crypto and blockchain space. However, the SEC filed a lawsuit against Ripple Labs, as well as against Garlinghouse and Larsen in December 2020, alleging that XRP is an unregistered security of USD 1.3 billion.
In November, the CFTC accused Ripple Labs of “unfair” and “misleading” conduct in relation to its currency XRP, an allegation that Ripple had denied. The claim came after its third round of share sales.
As of now, the said case has been dismissed. Ripple is going to resume its plan to launch more series of IPOs (initial public offerings). It was proposed that the investors will be both institutional as well as individuals authorized individuals. Moreover, 6.000 XRP (Ripple) investors have filed a collective complaint against Ripple for the damages this cryptocurrency has caused to the industry since 2017.
XRP Markets has been reflecting these news, experiencing strong growth in recent weeks. After bottoming out at $1.038 on 24th February, it has made a sharp recovery to a new all-time high of $1.456, having gained more than 20% this week alone.
Ripple’s objective to pursue an IPO isn’t surprising. More often than not, a rising stock will take the next step toward the public markets by filing for one.
But why would Ripple want to go public? It could be that they are trying to clean its image or cash in on the Bitcoin hype, but there is actually a logical reason. According to some opinions, Ripple wants to showcase its capabilities to banks and other major financial institutions, including potential partners who may be interested in using Ripple to transfer financial assets and payments between themselves.