Ripple Labs has formally responded to the US Securities and Exchange Commission (SEC) complaint. In addition to explaining that XRP cryptocurrency is not a security, Ripple also accused the securities regulator of anachronism, choosing winners and losers, and distorting the facts about cryptocurrencies.
- In a court document filed on January 29, Ripple claimed that XRP is not an “investment contract,” insisting that cryptocurrency “is a virtual currency and therefore is not within the jurisdiction of the SEC.” In addition, the company stated that it has never An Initial Coin Offering (ICO) has been held, future tokens have never been provided to raise funds, and it has nothing to do with the vast majority of XRP holders.
- Ripple said, however, the SEC is “inconsistent domestically and globally.” The company pointed out that no other regulatory agency in the world considers XRP a security. Ripple claimed, “Fundamentally, the Trump administration is trying to eliminate XRP as a virtual currency created during the Obama administration.”
- In its response, Ripple pointed out that regulatory agencies that have concluded that XRP is not a security include the US Department of Justice and the Financial Crime Enforcement Network (FinCEN). Two US authorities determined that XRP is a virtual currency in 2015 and 2020. In addition, the company added that the British Financial Conduct Authority (FCA) and regulators in Singapore and Japan have reached similar conclusions that XRP is not a security.
- Ripple also accused the SEC of “picking winners and losers.” The company claimed that “the current functions of XRP are not different in principle from those of BTC or ETH.” However, the SEC determined that these two cryptocurrencies are not securities. In addition, Ripple asserted: “Considering that XRP avoids the mining process, it is therefore more environmentally friendly than BTC and ETH…. From a policy perspective, this is important.”
- In addition, Ripple claimed that the SEC had “distorted the facts” and pointed out that “the complaint filed by the SEC was full of fascinating quotes extracted from the context and reached a conclusion that neither facts nor the law support.”
- The SEC filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse, and co-founder Christian Larsen in December, alleging that they sold more than 14.6 billion XRP units for at least $1.38 billion. XRP is considered unregistered securities. After the U.S. Securities and Exchange Commission (SEC) filed a lawsuit, several major cryptocurrency exchanges delisted XRP, including Coinbase, Binance, Okcoin, and Blockchain.com.
- Ripple stated that it hopes to resolve the dispute with the U.S. Securities and Exchange Commission (SEC) as soon as possible, and pointed out that XRP has lost nearly half of its market value due to a lawsuit filed by the securities regulator against the company and its executives. This has caused billions of dollars in losses to XRP retail investors unrelated to Ripple.
What do you think of Ripple’s response to the SEC allegations? Let us know in the comments section below.
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