Ripple delivered on Friday (29) the defense of its case against the United States Securities and Exchange Commission (SEC).
The document was delivered to the Southern District Court of New York. In its 93 pages, Ripple not only defends itself but launches tough attacks against the SEC.
Ripple attacks process premises
In its first paragraphs, Ripple criticizes the charges themselves. For the company, the process is based on an unprecedented and poorly conceived legal theory.
One of the charges is that the XRP cryptocurrency would be traded as a security. However, Ripple claims that the SEC ignores several other functions performed by XRP.
“For example, XRP works as a medium of exchange – a virtual currency used today in international and domestic transactions – moving value between jurisdictions and facilitating transactions,” said the company.
With that, Ripple again reinforced the argument that XRP is not a security. And therefore, the valuation on the cryptocurrency is not the responsibility of the SEC.
The company also cited a decision by the Network to Combat Financial Crimes (FinCEN).
In 2015, FinCEN determined that XRP was legally used and traded as a virtual currency, not a security. According to Ripple, the decision is in line with the reality of XRP.
The defense claims that it functions as a cryptocurrency or value reserve, and does not give users the right to share in Ripple’s profits or to vote.
This is the first defense delivered by Ripple since the opening of the case. Now the document will be analyzed by the court, with the first hearing scheduled for February.
Understand the process
The SEC’s lawsuit against Ripple was opened in late 2020. The municipality accuses Ripple of using XRP as a security, violating US rules.
Since then, the company has dealt with a number of problems, including blocking XRP negotiations. A second lawsuit was filed against the company recently, raising fears even further.
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