Ripple Labs has officially responded to the complaint by the US Securities and Exchange Commission (SEC). In addition to explaining that the XRP cryptocurrency is not a security, Ripple accuses the security regulator of being out of step and choosing winners and losers, as well as distorting facts about the cryptocurrency.
- In the court document filed on January 29, Ripple claims that XRP is not an ‘investment contract’, insisting that the crypto ‘is a virtual currency and therefore outside the SEC’s jurisdiction.’ Furthermore, the company stated that it had never had an initial coin offering (ICO), never offered future tokens to raise money, and that it had no relationship with the vast majority of XRP holders.
- However, the SEC is ‘out of step domestically and globally’, Ripple claims. The company noted that no other regulators in the world considered XRP as a security. Ripple claims that “the Trump administration basically tried to undo the assertion that XRP was a virtual currency created during the Obama administration.”
- Among the regulators who have concluded that XRP is not a security include the U.S. Department of Justice and Financial Crime Enforcement (FinCEN), Ripple noted in his response. The two U.S. authorities determined in 2015 and 2020 that XRP is a virtual currency. The company further added that the UK Financial Conduct Authority (FCA) and regulators in Singapore and Japan have similarly concluded that XRP is not a security.
- Ripple also accuses the SEC of ‘picking winners and losers’. The company claims that ‘there is no fundamental difference between the current function of XRP and that of BTC or ETH.’ However, the SEC states that the two cryptocurrencies are not securities. In addition, Ripple claims that ‘XRP is much more environmentally friendly than BTC and ETH, as it avoids the mining process … It should matter from a policy perspective.’
- In addition, Ripple claims that the SEC ‘distorted facts’ and said:’ The complaint lodged by the SEC is full of quotes taken from cherries, and it draws conclusions that are not supported by the facts and the law. ‘
- The SEC filed a lawsuit in December against Ripple Labs CEO Brad Garlinghouse and co-founder Christian Larsen, claiming that they owed more than 14.6 billion units of XRP, which he considers unregistered security, for at least $ 1 , 38 billion. Following the SEC lawsuit, several major cryptocurrency exchanges removed XRP, including Coinbase, Binance, Okcoin and Blockchain.com.
- Ripple says it wants to resolve the dispute with the SEC as quickly as possible, noting that XRP has lost nearly half of its market value since the security watchdog instituted the case against the company and its management tick. This has caused retail XRP investors to lose billions of dollars in losses without connecting to Ripple.
What do you think of Ripple’s response to the SEC’s allegations? Let us know in the comments below.
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