Ripple on Friday filed a formal 93-page response to a lawsuit by the US Securities and Exchange Commission (SEC) accusing it of selling more than $ 1.3 billion in unregistered securities. According to the defendant’s lawyers, “XRP’s functionality and liquidity are completely incompatible with regulation in the field of securities “.
Ripple says the SEC’s claim is based on “unprecedented and ill-considered legal theory.” “Among other things, they ignore the fact that XRP has many functions that are different from the functions of a ‘security’, as the law has understood this term for decades. For example, XRP functions as a virtual currency as a means of payment for international and domestic transactions. It is not a security, and the SEC does not have the authority to regulate it as such, ”the firm writes.
She also notes that she is doing her best to move the legal process as quickly as possible, despite its inherent slowness. “It’s important to move quickly because, as you know, XRP has lost almost half its market value since the SEC filed a claim, which has caused retail holders with no ties to Ripple – the very people the SEC should protect – have suffered multibillion-dollar losses. The SEC’s mission is to maintain order in the markets, but with their kinks they have plunged the market into chaos, ”adds Ripple.
The company recalls that XRP was recognized as a convertible virtual currency available for sale and circulation in the secondary market following its 2015 litigation with the Department of Justice and the US Financial Crimes Enforcement Network.
“Plaintiff was aware of this and, nevertheless, over the next years did not provide the defendants with clear notice that, in the opinion of the Plaintiff, the sales by the respondents of XRP permitted by the decision would be found to be in violation of other federal law,” the firm said.
Ripple also asks the SEC to provide documents explaining the basis on which it concluded that Bitcoin and Ethereum are not securities under the free flow of information law. “As we have said over the years, we are simply asking that the rules are clearly spelled out and applied equally to everyone,” the firm adds.