The US Securities and Exchange Commission is ignoring the fact that the XRP cryptocurrency has a use, the fintech startup Ripple claimed in its response to a securities complaint filed by the regulator.
In a report filed on Friday, Ripple Labs pushed back against allegations by the SEC that the San Francisco-based company had violated US securities laws for over seven years by selling XRP tokens valued at $ 1.3 billion have sold.
“The functionality and liquidity of XRP are completely incompatible with securities regulation. Requiring the registration of XRP as a security means compromising the main benefits, ”the response said.
In a 93-page filing, Ripple responded to every paragraph from the SEC. In its affirmative defense, Ripple stated that XRP is not a securities or investment contract and that the company’s sales or distributions of XRPs are also not investment contracts.
The SEC sued Ripple in December 2020, alleging the company, CEO Brad Garlinghouse and Chairman Chris Larsen sold over $ 1 billion worth of XRP, advertised the token and paid third parties to support the cryptocurrency.
Ripple also alleges that the SEC failed to provide fair information that the sale of XRP may be against the law.
It pointed to its agreement with the U.S. Department of Justice and the Financial Crimes Enforcement Network in 2015 that registered XRP as a convertible virtual currency and enabled sales and secondary market transactions.
“According to information and beliefs, Plaintiff was aware of this 2015 settlement, and yet for years Plaintiff made it clear to Defendants that, in Plaintiff’s view, Defendants’ potential XRP sales as allowed in the Agreement were nonetheless a violation of one another covenant would constitute law, ”the answer said.
“So far, they have failed to provide guidance on that determination, which is preventing responsible actors like Ripple from innovating in the US to deliver faster, cheaper, and more transparent global payments to the consumers who need it most. As we have said for many years, we are only asking that the rules be clearly defined and applied consistently, ”a spokesman said in a statement emailed.
XRP is up nearly 10% in the past 24 hours and has joined a wider surge in the crypto market, with Dogecoin soaring over 700% on Thursday.