Silicon Valley crypto mainstay Ripple and the United States Securities and Exchange Commission (SEC) have made considerable progress in their legal brawl, with the securities regulator recently filing its final reply in the case’s remedies stage before Judge Analisa Torres makes her ruling.
SEC Fires Shots In Final Response To Ripple
In the Tuesday redacted brief, the SEC described Ripple’s proposed U.S. dollar-pegged stablecoin as an “unregistered crypto asset,” contending that it proves the firm’s potential to continue conducting unregulated activities without a permanent injunction.
As ZyCrypto reported previously, Ripple unveiled its stablecoin plans in early April. The “enterprise-grade” crypto, expected later this year, will be launched across the XRP Ledger and Ethereum blockchains. The as-yet-unnamed crypto stablecoin will be backed 1-to-1 by cash equivalents including U.S. dollar deposits, U.S. government bonds, and other low-risk investments.
Ripple Chief Technology Officer David Schwartz said the company will reveal the name of the stablecoin project in June.
The SEC claims that Ripple’s main business has been the unregistered institutional sales of XRP since its launch and will continue if a permanent injunction is not granted.
The commission further pushed back against Ripple’s assurances that it would not break federal securities law because of its licenses in other jurisdictions, comparing the argument to “saying a New York restaurant need not obtain a liquor license because it obtained a fishing license in California.”
XRP Lawsuit “Closer Than Ever” To Conclusion
The question of whether XRP is a security won’t be answered until the Ripple-SEC four-year courtroom showdown concludes after appeals. At the moment, it’s a complicated situation. Judge Analisa Torres declared last July that XRP is NOT a security when traded on crypto exchanges, albeit it qualifies as an investment contract when Ripple sells the token to institutional investors.
In the Ripple vs. SEC case, the stakes are high financially. The regulator insists that the court should impose a substantial penalty on Ripple to discourage both the blockchain payments firm and possible copycats from similar actions in the future. While the SEC demands fines and penalties totaling $2 billion, Ripple maintains that a maximum penalty of $10 million is enough.
Ripple’s legal head, Stuart Alderoty, has slammed the SEC’s latest brief as baseless, describing it as another example of the agency’s failure to apply the law. Alderoty also noted that Ripple is “closer than ever” to leaving the suit behind them:
“More of the same from the SEC — failing to faithfully apply the law and trying to pull the wool over the Judge’s eyes. The good news is that we are closer than ever to putting this lawsuit behind us, though unfortunately, many are just starting the journey.”
XRP was trading for $0.5259 at press time, down 2.2% on the day.
