Ripple Formally Responds to SEC Allegations — Claims SEC Picking Winners and Losers, Distorting Facts About XRP
In the court document filed on Jan. 29, Ripple claims that XRP is not an “investment contract,” insisting that the crypto “is a virtual currency and thus, outside the SEC’s jurisdiction.” Furthermore, the company stated that it never held an initial coin offering (ICO), never offered future tokens to raise money, and has no relationship with the vast majority of XRP holders.
The SEC, however, is “out of step domestically and globally,” claims Ripple. The company noted that no other regulators in the world have considered XRP to be a security. Ripple alleges that “Basically, on its way out, the Trump administration sought to undo the determination that XRP was a virtual currency made during the Obama administration.”
Among the regulators that have concluded that XRP is not a security include the U.S. Department of Justice and the Financial Crimes Enforcement Network (FinCEN), Ripple noted in its response. The two U.S. authorities determined in 2015 and 2020 that XRP is a virtual currency. Furthermore, the company added that the U.K. Financial Conduct Authority (FCA) and the regulators in Singapore and Japan have similarly concluded that XRP is a not a security.
Ripple also accuses the SEC of “picking winners and losers.” The company claims that “there is no principled distinction between XRP’s current function and that of BTC or ETH.” Yet, the SEC determines that the two cryptocurrencies are not securities. In addition, Ripple asserted that “XRP is a great deal more environmentally friendly than BTC and ETH, considering it avoids the mining process … That must matter from a policy perspective.”
Moreover, Ripple alleges that the SEC has “distorted the facts,” stating that “The complaint filed by the SEC is full of cherry-picked quotes taken out of context, and draws conclusions that are unsupported by both the facts and the law.”
The SEC filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse, and co-founder Christian Larsen in December alleging that they sold over 14.6 billion units of XRP, which it considers unregistered security, for at least $1.38 billion. After the SEC’s lawsuit, several major cryptocurrency exchanges delisted XRP, including Coinbase, Binance, Okcoin, and Blockchain.com.
Ripple says it wants to resolve the dispute with the SEC as fast as possible, noting that since the securities watchdog brought the lawsuit against the company and its executives, XRP lost almost half of its market value. This has caused retail XRP investors with no connection to Ripple to suffer billions of dollars in losses.
What do you think about Ripple’s response to the SEC’s allegations? Let us know in the comments section below.
Visa CEO Says Payments Giant Set to Introduce Cryptocurrency Trading on Its Network
Digital Gold Segment
In an earnings call with analysts, Kelly opines that due to Visa’s “global presence, its partnership approach as well as its trusted brand”, the fintech giant is “uniquely positioned to help make cryptocurrencies more safe.” The CEO adds that Visa also wants to make cryptos “more useful and applicable for payments.”
However, to achieve this, Kelly says his organization will divide the crypto market into two segments, namely cryptocurrencies and digital currencies. Describing the assets that will be included in the cryptocurrency segment, the CEO says these will be viewed “as digital gold.” According to Kelly, such currencies are “predominantly held as assets that are not used as a form of payment in a significant way at this point.” The Visa boss then discusses the firm’s plan for such currencies saying:
Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their Visa credentials or to cash out onto a Visa credential to make a fiat purchase at any of the 70 million merchants where Visa’s accepted globally.
According to Kelly, this strategy will be similar to Visa’s approach to “connect closed-loop wallets such as Line Pay and Paytm.”
Digital Currency Segment
Concerning digital currencies that will feature in the second segment, the Visa CEO says these will be consist of “fiat-backed digital currencies including stablecoins and central bank digital currencies.” He adds that these emerging payments innovations can potentially be “used for global commerce much like any other fiat currency.”
Meanwhile, the Visa CEO reveals some of the 35 organizations that have already chosen to issue Visa cards. These include leading digital currency platforms and wallets providers like “crypto.com, Blockfi, Fold, and Bitpanda.” According to Kelly, these wallet relationships “represent the potential for more than 50 million Visa credentials.”
What do you think of Visa’s plan to introduce crypto trading on its platform? You can share views in the comments section below.