Ripple Labs has formally replied to the complaint by the U.S. Securities and Exchange Commission (SEC). Also, explaining that the XRP cryptocurrency is not a security, Ripple accuses the securities regulator of being out of step, picking winners and losers, and misrepresenting facts regarding the cryptocurrency.
In the court document filed on Jan. 29, Ripple claims that XRP is not an “investment contract,” asserting that the crypto “is a virtual currency and thus, outside the SEC’s jurisdiction.” Moreover, the company affirmed that it never held an initial coin offering (ICO), never offered future tokens to raise money, and has no connection with the vast majority of XRP holders.
The SEC, nevertheless, is “out of step domestically and globally,” declares Ripple. The company remarked that no other regulators in the world had viewed XRP to be a security. Ripple claims that,
“Basically, on its way out, the Trump administration sought to undo the determination that XRP was a virtual currency made during the Obama administration.”
Amid the regulators who have concluded that XRP is not security, including the U.S. Department of Justice and the Financial Crimes Enforcement Network (FinCEN), Ripple noted its response. The two U.S. authorities determined in 2015 and 2020 that XRP is a virtual currency.
Furthermore, the company continued that the U.K. Financial Conduct Authority (FCA) and the regulators in Singapore and Japan have likewise decided that XRP is not a security.
Ripple also challenges the SEC of “picking winners and losers.” The company alleges that “there is no principled distinction between XRP’s current function and that of BTC or ETH.”
Still, the SEC concludes that the two cryptocurrencies are not securities.
Additionally, Ripple asserted that,
“XRP is a great deal more environmentally friendly than BTC and ETH, granting it avoids the mining process … That must matter from a policy perspective.”
Furthermore, Ripple claims that the SEC has “distorted the facts,” stating that “The complaint filed by the SEC is full of cherry-picked quotes taken out of context, and draws conclusions that are unsupported by both the facts and the law.”
The SEC filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse, and co-founder Christian Larsen in December, alleging that they sold over 14.6 billion units of XRP, which it considers unregistered security, for at least $1.38 billion. After the SEC’s lawsuit, several major cryptocurrency exchanges delisted XRP, including Coinbase, Binance, Okcoin, and Blockchain.com.
Ripple states it wants to resolve the dispute with the SEC as fast as possible, remarking that since the securities watchdog carried the lawsuit against the company and its executives, XRP lost nearly half its market value. This has made retail XRP investors with no connection to Ripple suffer billions of dollars in losses.
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