Ripple, the embattled blockchain firm at loggerheads with the U.S. Securities and Exchange Commission (SEC), has filed a court response to the agency’s lawsuit, the company announced on Jan. 29.
The securities regulator sued Ripple in December last year for raising more than $1.3 billion through an inappropriate securities sale of XRP digital tokens.
A legal response to SEC’s complaint
Ripple’s General Counsel Stuart Alderoty tweeted that the firm filed its legal response to the SEC’s lawsuit to “set the record straight and correct many misconceptions and contradictions with their allegations.”
In a note to Ripple’s employees, Alderoty said they want to resolve the matter as quickly as possible despite the slow legal process.
He added that the response, which mirrors the summary of the firm’s Wells Submission, is a long document (93 pages).
XRP is not an investment contract
Ripple, which has maintained that XRP is not a security, reinforced that claim by stating that the token is not an investment contract.
The token is a virtual currency and should not be under the purview of the securities regulator, the firm argues.
The company further says that it did not hold an ICO and does not have any kind of relationship with the majority of the token holders. Alderoty adds that the firm did not enter into an investment contract with token holders.
He added that XRP tokens have been trading in the open markets for 8 years.
The response argues that the SEC is treading alone as it is out of step “globally and domestically.”
The Department of Justice (DoJ) and the Financial Crimes Enforcement Network (FinCEN) have ruled out that XRP is a virtual currency and have regulated it as such.
The firm says that the UK, Singapore, and Japan have all determined that the token is a virtual currency.
Ripple takes a shot at Bitcoin and Ethereum
The firm accuses the SEC of cherry-picking winners and favoring Bitcoin and Ethereum.
“There is no principled distinction between XRP’s current function and that of BTC or ETH.”
The firm wants the SEC to explain how BTC and ETH are not securities while the opposite is true for XRP.
Ripple also claims that they are not fighting for themselves alone but for the industry as a whole.