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Ripple has denied that it is a security and claims it never conducted an ICO in a new response to an ongoing SEC lawsuit.
Ripple, in a response to the U.S. Securities and Exchange Commission to dismiss the related lawsuit, has said that it never conducted an ICO.
Ripple Fires Back
Now that the seventh-largest cryptocurrency by market cap has been embroiled in a lawsuit, doubts are being cast on XRP. Ripple, however, is holding its ground, denying all allegations made in the complaint.
The primary complaint in the lawsuit is that Ripple its XRP token violated the Securities Act of 1933. Ripple’s defense is that XRP serves purposes that invalidate its classification as a security. The filing cites the token’s function as a medium of exchange, and therefore, the SEC has no authority to regulate 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 also recently filed a lawsuit against YouTube for XRP giveaway scams that involved the impersonation of company officials. Garlinghouse tweeted on March 10 about the lawsuit’s development. He claims a new resolution would “prevent, detect and take down these scams.”
Retail investors have also filed lawsuits against Ripple. This even includes one investor who lost $48. Like previous complaints, the suit claims that Ripple failed to register XRP as a security.
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.