Ripple Labs officially responded to the United States Securities and Exchange Commission (SEC) complaint. In addition to explaining that the XRP cryptocurrency is not a bond, Ripple accuses the securities regulator of being out of step, choosing winners and losers, as well as distorting the facts about the cryptocurrency.
- In the court document filed on January 29, Ripple states that XRP is not an “investment contract”, insisting that cryptography “is a virtual currency and therefore outside the SEC’s jurisdiction”. In addition, the company stated that it never conducted an initial coin offering (ICO), never offered future tokens to raise money and has no relationship with the vast majority of XRP holders.
- The SEC, however, is “out of tune at home and globally,” says Ripple. The company noted that no other regulator in the world has considered XRP a title. Ripple claims that “Basically, on his departure, the Trump administration sought to undo the determination that XRP was a virtual currency made during the Obama administration.”
- Regulators who concluded that XRP is not a security clearance include the United States Department of Justice and the Financial Crimes Enforcement Network (FinCEN), noted Ripple in his response. The two U.S. officials determined in 2015 and 2020 that XRP is a virtual currency. In addition, the company added that the UK Financial Conduct Authority (FCA) and regulators in Singapore and Japan also concluded that XRP is not a security.
- Ripple also accuses the SEC of “choosing winners and losers”. The company claims that “there is no distinction in principle between the current role of XRP and that of BTC or ETH.” Still, the SEC determines that the two cryptocurrencies are not bonds. In addition, Ripple stated that “XRP is much more environmentally friendly than BTC and ETH, considering that it avoids the mining process … This must be important from a policy point of view.
- In addition, Ripple claims that the SEC “distorted the facts”, saying that “The complaint filed by the SEC is full of handpicked and out of context citations, and draws conclusions that are not supported by the facts and the law.”
- The SEC filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse and co-founder Christian Larsen in December, claiming that they sold more than 14.6 billion units of XRP, which they consider an unregistered security, for at least $ 1 , 38 billion. Following the SEC process, several major cryptocurrency exchanges removed XRP from the list, including Coinbase, Binance, Okcoin and Blockchain.com.
- Ripple says he wants to resolve the dispute with the SEC as soon as possible, noting that, since securities oversight has moved the lawsuit against the company and its executives, XRP has lost almost half of its market value. This caused XRP retail investors without a connection to Ripple to suffer billions of dollars in losses.
What do you think of Ripple’s response to the SEC’s allegations? Let us know in the comments section below.
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