Lawsuit of SEC against Ripple

Source: Reuters

  • Investors request amendment in SEC case against Ripple.
  • They say that US exchanges are set to suspend XRP trading, which is going to hurt them economically.

A group of investors in the cryptocurrency XRP filed a petition in the Rhode Island District Court, requesting a mandamus order or injunction against the acting president of the United States Securities and Exchange Commission (SEC), Eliad Roisman, to modify the lawsuit against Ripple Labs, INC.

An order of mandamus, as it is known legally, is an order issued by a higher judge at the request of an applicant that requires the performance of a duty that is legally required to complete. With this action, what is being requested is that the court oblige the SEC to fulfill its mission of protecting XRP investors and change the rating that the body made with respect to the cryptocurrency.

The group of plaintiffs, made up of six people residing in the United States, has submitted this request in writing to the aforementioned court, so that the complaint filed by the SEC against the technology company be modified, and that their investments in XRP are not considered as a security.

They argue that “today’s XRP” is not a security. They believe that in these years of XRP’s existence the SEC could have targeted specific distributions of the crypto asset, especially in its early days, from 2013 to 2015.

Any claim or argument that XRP constitutes an unregistered security could only be made in those early days and distributions. The SEC could have targeted those early Ripple distributions and any individual sale by its executives, without absurdly trying to call the XRP listed in the petitioners’ portfolio as unregistered securities.

Group of plaintiffs.

They claim that former SEC Chairman Jay Clayton “knowingly and intentionally caused multimillion-dollar losses to innocent investors who have bought, traded, received, and / or acquired XRP, including named petitioners, and all similarly situated.”

They added that major cryptocurrency exchanges in the United States are already set to desist or suspend all XRP operations. After that, the cryptocurrency that you own will “lose all its value and become useless.”

The petition to the Rhode Island District Court is signed by investors Jhon Deaton, Jordan Deaton, James Lamonte, Tyler Lamonte, Mitchell McKenna and Kristina Warner. We must wait to see if this request is approved, while the SEC and Ripple prepare to start a judicial procedure on February 22.

The New York District Court will take the case, led by Judge Analisa Torres, who has ordered both parties that the appearance be made by phone, due to the Covid-19 pandemic.

It also ordered the SEC and Ripple to submit a joint letter by February 15, containing: “1) a brief description of the case, including the factual and legal basis of the claim (s) and defense (s) ; 2) any contemplated motion; and 3) prospects for the solution.

SEC insists XRP is a security

The SEC sued Ripple Labs, INC and its co-founders Cristian Larsen and Bradley Garlinghouse late last year, claiming they have raised more than $ 1.3 billion since 2013 through an ongoing, unregistered sale of XRP securities intended to finance company activities.

The SEC considers that this asset is an unregistered security and Ripple, for its part, maintains that it is a virtual currency.

As a consequence of the lawsuit, cryptocurrency exchanges Binance and eToro recently announced to their clients that they would suspend trading in the cryptocurrency XRP.

More exchanges have also said ‘no’ to XRP trading on their platforms, such as Bitrex and Coinbase. As reported by this media, until the end of December 2020 at least 12 crypto exchanges had been counted that made similar decisions.

XRP is the cryptocurrency created by the company Ripple Labs, INC, as a solution aimed at allowing banks and financial institutions of all kinds to use the power of so-called blockchain technology to improve their cross-border transaction systems.

At time of writing, XRP is trading at $0.2328, which is a 3.8% daily gain. This bullish move pushes XRP’s capitalization up to $10.57 billion.