Ripple, the cross-border payment firm, has responded to the amended complaint filed by the United States Securities and Exchange Commission (SEC), stating that action of the securities regulator has initiated the loss of relatively $15 billion of investors’ funds, which the agency is purportedly protecting.
In a letter addressed to the United States District Court Southern District of New York on Thursday 4th March 2021, Ripple pointed out that the fact it holds a large percentage of XRP “does not and cannot render it an investment contract.”
SEC Damaged Investors It’s Obligated to Protect
According to Ripple in its response to SEC’s amended complaint, the mere filing, which seems to be a means to protect investors’ interest is rather causing huge damage. Due to this action, many market participants have ceased their usual activities in XRP, causing an estimated $15 billion in loss to those it’s employed to protect.
Ripple’s response reads in part as follows:
“And the Complaint’s mere filing has caused immense harm to XRP holders, cutting the value of their holdings substantially and causing numerous exchanges, market makers, and other market participants to cease activities in XRP.
“In bringing a case that alleges an unregistered offering of just over $1.3 billion “from at least 2013,” the SEC has already caused more than an estimated $15 billion in damage to those it purports to protect.”
Ripple Compares Holding a Large Percentage of XRP to Exxon’s Oil and De Beers’ Diamonds
Ripple further stated that the fact it currently holds a large percentage of XRP is not the proper yardstick to render it an investment contract. The firm cited many firms such as Exxon, De Beers, Bitmain, among others that own large amounts of commodities and participate heavily in the commodities markets as examples:
“Ripple holds a large percentage of XRP, but that alone does not and cannot render it an investment contract. Many entities own large amounts of commodities and participate heavily in the commodities markets — Exxon holds large quantities of oil, De Beers owns large quantities of diamonds, Bitmain and other Chinese miners own a large percentage of outstanding Bitcoin.
“Such large commodity owners inevitably have interests aligned with some purchasers of the underlying asset. But there is no credible argument that substantial holdings convert those commodities or currencies into securities, nor has any case so held.”
Meanwhile, Ripple CEO Brad Garlinghouse and the co-founder Chris Larsen have also filed a motion to dismiss the SEC’s filing.