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Ripple has disputed that it is a surveillance measure and says that it has never performed an ICO in a recent response to a pending SEC litigation.
In reaction to the U.S. Securities and Exchange Commission’s dismissal of the associated litigation, Ripple stated that it has never performed an ICO.
Ripple Fires Back
Now that the seventh-largest market cap cryptocurrency has been indicted, questions are being cast on XRP. However, Ripple maintains its ground and denies all the claims made in the lawsuit.
The key argument in the case is that Ripple’s XRP token violated the Securities Act of 1933. Ripple’s defence is that XRP serves functions that invalidate its security designation. The filing refers to the role of the token as a means of trade and, thus, the SEC has no power to control it.
Ripple’s defense emphatically states that XRP issuance was not a sale of securities. It also notes that classifying XRP as a security would “impair its main utility”. It would also mean thousands of exchanges, market-makers, and other actors would be subject to complex legal processes.
The SEC filed the lawsuit in Dec. 2020 and claimed that Ripple unlawfully raised $1.3 billion through the offering. The lawsuit sent shockwaves through the crypto world and caused the price of XRP to plummet. Since then, however, the token has retraced a bit in value.
CEO Brad Garlinghouse also filed a dismissal motion in a lawsuit against him. In remarks that are tonally similar to the latest filing, the document states that the SEC allowed XRP to function for eight years. Thus, it questioned the sudden change.
An Attack on All Fronts
Ripple has recently filed a lawsuit against YouTube for XRP giving away scams involving the impersonation of business officials. Garlinghouse tweeted about the development of the case on March 10. He argues that a proposed resolution will “prevent, track and eradicate these scams.”
Retail investors have also brought litigation against Ripple. This involves an investor who has lost $48. Like previous lawsuits, the suit argues that Ripple did not register XRP as protection.
All of these developments have put Ripple between a rock and a hard place. Many investors, meanwhile, are holding onto their XRP, waiting for a final verdict. The consequences of a failed defense may or may not have a worldwide impact. It’s been suggested that 95% of Ripple customers are outside the jurisdiction of the U.S.