Ripple has officially responded to the U.S Securities and Exchange Commission’s (SEC) allegations in a 100-page document that mentions the word “denies” 440 times.
According to court documents filed in the Southern District of New York, Ripple refutes the SEC’s main allegation that the payments startup participated in an illegal securities offering when they first issued XRP to investors.
“Ripple denies it engaged in any offering of securities; denies the inaccurate characterization of the legal advice Ripple received regarding XRP; and denies that it engaged in a single ‘offering’ of XRP.”
Ripple also takes issue with the SEC’s use of the term “offering” to describe how the San Francisco-based company sold and distributed its native token.
In addition, Ripple asserts that XRP’s characteristics make it incompatible with traditional securities regulation and that being forced to go through those regulations would negatively impact its main purpose as a cryptocurrency.
“Before this case, no securities regulator in the world has claimed that transactions in XRP must be registered as securities, and for good reason. 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. That utility depends on XRP’s near-instantaneous and seamless settlement in low-cost transactions. Treating XRP as a security, by contrast, would subject thousands of exchanges, market-makers, and other actors in the gigantic virtual currency market to lengthy, complex and costly regulatory requirements never intended to govern virtual currencies.”
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