Answering SEC allegations
Ripple filed a detailed response to the allegations made by the SEC in a lawsuit filed against the company and its top executives in December. The statement was code-named ‘The Answer’ and it focused on refuting the claims made by the regulators. The SEC alleged that the firm carried out an unauthorized and unregulated securities offering of $1.3 billion. Ripple’s legal team said that the agency’s allegations are “Out of Step Domestically and Globally.” They also explained that no other regulator in the world deemed XRP as a security.
It said that in 2015 and 2020, the US Department of Justice and FinCEN determined that XRP is a virtual currency. The original ruling was made in the Obama administration and the Trump White House tried to overturn it. However, despite these efforts, XRP has traded as a non-security. The company said that the lack of clarity from regulators about the status of the XRP token is a primary sticking point. In other jurisdictions like Singapore, Switzerland, Japan, and the UK, it has been operating under clear rules.
Bias from the SEC?
Ripple said that there is no difference between how XRP and other cryptos like Bitcoin and Ethereum operate. The SEC has clarified that it doesn’t view Bitcoin and Ethereum as securities. Now Ripple has filed a Freedom of Information request with the regulator, asking the agency to explain how Ethereum, which started as security, has now become a non-security. It also seeks documents that determine the framework of its judgement and the regulator’s contact with the founders of Ethereum.
The firm added that XRP is more environmentally friendly than other cryptos, which leave a huge carbon footprint because of their excessive energy consumption during mining. The company also criticized the lawsuit, saying that it was cherry-picking quotes and was affecting people who hold XRP and have no connection to the company.