Blockchain payments company Ripple has responded to the U.S. Securities and Exchange Commission’s (SEC) lawsuit over the illegal sale of XRP with an inquiry into Ethereum.
In a filing published Friday, Ripple challenged the SEC’s allegations claiming the San Francisco-based company had violated securities laws via the sale of $1.3 billion in XRP tokens.
The response reads,
The functionality and liquidity of XRP are wholly incompatible with securities regulation. To require XRP’s registration as a security is to impair its main utility.
The filing refuted each of the SEC’s claims in a detailed report, concluding that XRP did not constitute a security or investment contract. Ripple argued the SEC failed to properly acknowledge the utility of XRP, ignoring the token’s open-source protocol and price correlation with other top cryptoassets.
In addition to the filing, Ripple submitted a Freedom of Information Act (FOIA), requesting information pertaining to the nature of the Ethereum and whether it constituted a security under SEC law.
A representative for Ripple told CoinTelegraph,
The SEC has clearly picked two winners and ignored a growing and robust industry that is much larger than Bitcoin and Ether. In addition to discovery we will seek directly in the lawsuit, we filed a Freedom of Information Act (FOIA) request for more information about how the SEC determined the status of Ether as a non-security.