United Kingdom-based cryptocurrency gateway service GateHub has revealed it will keep XRP listed until the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Ripple Labs is resolved, following the footsteps of crypto exchange Uphold.
Please be advised that GateHub Ltd. will continue listing XRP until the SEC’s complaint against Ripple is adjudicated and a final decision entered that XRP is properly classified as a ‘security,’ or until we receive a cease-and-desist notice from the SEC.
GateHub pointed out that its decision comes after it carefully reviewed the SEC’s complaint against Ripple. As reported, the lawsuit was announced on December 22, one day before former SEC Chairman Jay Clayton resigned, and names Ripple’s two of its executives, who are also significant security holders, alleging that they “raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”
The crypto firm revealed it doesn’t believe XRP is a security, and pointed out that if the SEC had issued any guidance that XRP would be treated as an unregistered security it would have “refused to do business with Ripple or anyone at Ripple who, in our judgement, engaged in fraudulent market practices.”
The announcement says:
We have never believed that XRP is a “security” under the prevailing “Howey” test in the US, and regard XRP primarily as a “utility” token whose value is based on its use in payments and foreign exchange.
Per GateHub, if Ripple defrauded individual investors it should be “subject to appropriate enforcement actions, and be forced to disgorge any ill-gotten gains.” That, however, is a “far cry” from the SEC’s move to classify the token as a security, which has “potentially catastrophic consequences for individual investors, who did nothing wrong.
The firm’s comments echo those of Uphold, which at the time wrote “that the SEC’s goal is to protect consumers, and believes it’s hard to see “how a judgment rendering XRP essentially worthless and inflicting billions of dollars of losses on retail investors” would square with that goal.
Other cryptocurrency exchanges reacted more defensively, however, and delisted XRP. Platforms like eToro, Coinbase, Binance.US, Bittrex, and Bitstamp announced they would delist the cryptocurrency after the SEC’s lawsuit was announced.
Ripple has also argued that the SEC’s lawsuit has hurt “countless innocent XRP retail holders with no connection to Ripple,” and added it “muddied the waters for exchanges, market makers, and traders.”
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