Ripple filed a motion to dismiss the suit before the trial in Manhattan’s federal court. According to the blockchain firm, XRP, the crypto-asset that is at the heart of the ongoing legal battle, cannot be considered a security.
Ripple claimed that there was no investment contract that gave investors rights or required that the issuer act in their best interests.
The D-Day is near for Ripple-SEC
Ripple also claimed that the United States Securities and Exchange Commission’s (“SEC”) “untethered situation” could allow the sale of any type of ordinary assets (including diamonds, gold and soybeans), to be considered securities sales. Ripple stated that Congress did not grant such authority to the agency.
The San Francisco-based firm stated that the SEC’s claim would be denied. It cited the absence of documents granting recipients post-sale rights as against Ripple and imposed post-sale duties on the firm to act in the best interests of the recipients.
Stuart Alderoty, Ripple’s General Counsel, stated in a statement that
“The SEC is acting beyond their legal boundaries, as shown by the filings. The SEC isn’t looking to enforce the law, they are trying to change the law to expand their jurisdiction.
Call for immediate ruling
In December 2020, the SEC sued Ripple Labs CEO Brad Garlinghouse and Chairman Chris Larsen. According to the agency, Ripple Labs, CEO Brad Garlinghouse and Chairman Chris Larsen were accused of obtaining more than $1.3 Billion in sales of XRP in unregistered securities transactions.
The watchdog remained firm in its stance, saying that Ripple had “financed its business by touting XRP’s profit potential, selling XRP to investors while keeping a large portion of XRP for its own use.”
However, the blockchain firm maintained that the sale of the crypto-assets and trading failed to satisfy the Howey Test. This is a US Supreme Court case which determines if a transaction is a security.
Separate motions were filed by Ripple Labs and the SEC asking for a ruling from the US District Court Southern District of New York on whether XRP sales infringed the country’s securities law.
CryptoPotato’s first post, Ripple Attacks SEC Citing a Lack of Investment Contract Granting Investors Rights appeared originally on CryptoPotato.
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