Key facts:
The potential IPO would take place once the SEC’s lawsuit is resolved.
XRP cryptocurrency is the sixth largest, based on its market capitalization.
The company behind the XRP cryptocurrency, Ripple Labs, is preparing the way for its arrival in the stock markets. This was confirmed by Brad Garlinghouse, CEO of the company, who assured that there is a “very high” probability that the organization will go public soon.
Although the executive did not specify when Ripple Labs would request its listing on the stock exchange, Garlinghouse indicated that the process before the United States Securities and Exchange Commission (SEC) will take place “at some point”.
The most widespread theory is that the public offering for the sale of shares (IPO) would be executed after the company resolves its dispute with the SEC. In December of last year the commission sued Ripple Labs for the sale of 1.3 billion dollars in XRP and accused it of trading unregistered securities, a fact reported by CryptoNews.
Ripple Labs argues that the crypto asset they issue is not a security, but rather a cryptocurrency, like others that exist in the market, so they would not need a direct authorization from the SEC to publicly trade it. XRP is currently the sixth largest cryptocurrency, based on its total market capitalization, which already exceeds $ 45 billion, according to CoinGecko records.
Ripple on its way to go public
Garlinghouse’s message about the potential public listing of Ripple Labs could be interpreted in a number of ways. The first is that the legal action against the company could be resolved, but not before the company pays a generous fine. In the event that this scenario occurs and the penalty is paid, then the organization could make a clean slate before the SEC.
The second is that the executive would be trying to better position the price of XRP in the market. Six months ago when the demand occurred, the cryptocurrency lost more than 30% of its price in a few days. However, and due to the bull market, the price has been on the rise and is currently trading at 0.97 dollars per unit. In December the price fell to $ 0.21.
To go public, Ripple must submit to the SEC a form S-1, or initial registration informative prospectus, which will be analyzed by the commission to decide whether the request proceeds or not. Among the companies in the cryptocurrency ecosystem that are already publicly listed on the stock exchange, there is the case of the Coinbase exchange that operates on the Nasdaq market.
To get to the stock market, a company must decide whether to opt for an IPO or to take the direct listing route. In IPOs, an intermediary creates, subscribes for new shares and offers them in “pre-sale” to institutional investors, usually at a lower price, before going to market. In direct listing, companies sell shares to the public without intermediaries and without “pre-sales.”
