Crypto exchanges have as recently as 2019 asked the U.S. Securities and Exchange Commission (SEC) whether they could transact with XRP, and concluded they could move forward, according to new information surfacing from Ripple’s ongoing lawsuit.
Lawyer and XRP enthusiast Jeremy Hogan sat in on Ripple’s digital pre-trial court hearing with the SEC on Tuesday, and says the San Francisco payments company found out the new information in a pre-trial discovery.
Hogan calls the revelation a potential bombshell.
“As recently as 2019, the SEC was approached by a large crypto exchange — or maybe exchanges — and asked, ‘Hey, SEC – can we sell XRP? Or is it a security so we can’t sell it? Please let us know.’ And the SEC did not tell them, ‘No, it is a security, you cannot sell it…’
That is a big problem for the SEC and I don’t know how they get around that, because what changed between 2019 and December 2020 when the lawsuit was filed? Did XRP become a security during that year? If anything, it became more like a currency and less like a security as time went on.”
Ripple general counsel Stuart Alderoty agrees.
“The law requires that persons of ordinary intelligence be given fair notice of what’s prohibited. That’s why it’s important we learned that sophisticated parties – after engaging with the SEC – concluded that transacting in XRP wasn’t prohibited, but in fact, permitted.”
The SEC filed its lawsuit in late December, declaring XRP is a security and accusing Ripple of selling the crypto asset without proper authorization.
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