Both of the US SEC’s grievances against the blockchain payment firm and its co-founders, Brad Garlinghouse and Chris Larsen, were addressed by Ripple.
Ripple has filed its response to complaints from the US SEC. On January 29th, the blockchain company filed its response and filed a request for a Freedom Of Information Act. Ripple offers a response to each of the SEC’s grievances against Ripple Labs Inc. and Brad Garlinghouse and Chris Larsen, its co-founders. The group mainly claims that there is no protection for XRP. Earlier, the SEC had brought a complaint against Ripple claiming that unregistered security had been sold.
XRP performs many functions that are different from “security” functions.
In its answer, Ripple claimed that XRP performs a number of separate functions from the “security” functions, as the law has understood that term for decades. For instance, XRP acts as an exchange medium, a virtual currency used today in foreign and domestic transactions, shifting value and facilitating transactions between jurisdictions. It is not a defense and, Ripple noted in its opening statement, the SEC has no power to control it as one. Ripple offered 93 pages of explanations why XRP is not a security and why its sale was not an unregistered offering of securities.
There are some similarities made by Ripple to Bitcoin and Ethereum.
The Ripple Labs team makes many comparisons to BTC and ethereum in the letter and asks for clarification as to why both of those digital currencies, especially ethereum, are not considered securities, even though the initial offering of Ethereum has several similarities to the initial offering of Ripple. Even though the initial sales of XRP and ETH had a similar structure, the company also filed a Freedom of Information Act request to learn why Ethereum is not considered secure. A request for a Freedom of Information Act requires the party that files the request to access government records and incident-related information.