Ripple, the San Francisco based cross-border payment firm, has announced that it has filed its initial response to the lawsuit filed by the United States Securities and Exchange Commission (SEC) over the sale of XRP.
In late December 2020, the U.S. SEC filed a lawsuit against Ripple, claiming in its complaint that the payment firm “raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide.”
The significant allegation resulted in the delisting or suspension of XRP trading by cryptocurrency exchanges and crypto-related firms across the industry.
Ripple Files a Response at the Federal Court
The response, filed on Friday 29th January 2021, states that the lawsuit filed by SEC is based on an unprecedented and ill-conceived legal theory.
The firm wrote in the introduction of its 93-page response as follows:
“That theory ignores, among many other things, that XRP performs a number of functions that are distinct from the functions of “securities” as the law has understood that term for decades. For example, XRP functions as a medium of exchange — a virtual currency used today in international and domestic transactions — moving value between jurisdictions and facilitating transactions. It is not a security and the SEC has no authority to regulate it as one.”
Likewise, Ripple has submitted a Freedom of Information Act request with the SEC, seeking a lot of information, such as any determination that Ethereum (ETH), the second-largest digital currency by market cap, is not a security.
Ripple Says It’s Working to Get the Lawsuit Resolved as Quickly as Possible
In a statement on Friday, Ripple stated that it’s working to get the issue resolved as quickly as possible to bring clarity to the broader market.
The statement, written by Ripple’s general counsel, Stu Alderoty, reads as follows:
“Moving quickly is important because, as you know, since the SEC filed its complaint, XRP lost almost half of its market value, causing retail holders of XRP with no connection to Ripple– the very people the SEC purports to protect – to suffer billions of dollars in losses. What’s more, part of the SEC’s mission is to maintain orderly markets… and yet their overreach created havoc in the market.”
The full court response can be found below: