Ripple replies SEC: gives reasons why XRP is not a security
2 min readTL;DR Breakdown
- Ripple reiterates that XRP is not a security.
- The crypto company files a Freedom of Information Act to know why the authorities do not classify Ethereum as a security.
Ripple has filed a 93 pages response to the allegations of the United States Securities and Exchange Commision (SEC) claims that its native token, XRP, is a security and not a cryptocurrency. The San Francisco-based crypto company provided a response to each complaint the SEC had raised against the firm and its co-founders.
Ripple says XRP is just like BTC and ETH
According to the defense, Ripple has said its XRP token is just like the leading two cryptocurrencies, Bitcoin and Ethereum. The firm went on to demand why the authorities do not consider any of these tokens to be securities.
The crypto payment company went on to make a comparison between its token’s initial offering and that of Ethereum too saying they both have many similarities. So, it is wondering why its token is labeled as a security and ETH is not.
To clarify its doubt, Ripple went on to file for a Freedom of Information Act request to understand why the second largest crypto asset is not considered to be security, despite the fact that both tokens share a similar initial sales structure.
A freedom of information request is usually demanded by individuals or institutions who want to have access to federal documents and information that may be related to an incident or event.
XRP performs several functions
Part of its defense is that XRP performs a number of functions that differentiates it from securities. According to Ripple, one of such functions that the token performs is that it serves as a medium of exchange between transacting partners.
The firm noted that the asset was being used to move value in international and domestic transactions and facilitating more transactions through its unique features. Securities, however, are unable to perform this function.
Ripple added that the SEC has no authority to regulate the crypto asset as a security because it does not perform functions of securities.
