Ripple’s general counsel claims that the Securities and Exchange Commission (SEC) has officially recognized XRP as a legal means of moving money across borders. According to Stuart Alderoty, the commission’s recognition and acceptance of XRP as a useful and legitimate means of transaction across borders is evident in its recent case against Ripple.
The commission refers to the Ripple’s utility as On-Demand Liquidity (ODL). The lawsuit goes further to explain ODL as a business deal whereby a money sender exchanges fiat money into XRP, sends the XRP to the locality of the recipient, and then changes the XRP into the fiat money of that locality. Naturally, XRP should be the one to be responsible for the transaction. But in this case, money senders who are using ODL usually count on market makers in the locality of the two parties involves in the transaction (the sender and the receiver) to exchange XRP in just a few seconds.
Ripple Will Respond to SEC’s allegations soon
Ripple’s counsel asserts that the section of the lawsuit where SEC acknowledges the XRP as a valid utility for transacting businesses across borders is a valid point to note as Ripple is preparing its defense against SEC’s allegations. Stuart affirms that the commission’s position on XRP as a legal means of online payment solution is a straightforward way of accepting it as one of the recent technological innovations.
He affirms XRP as innovation and a model for convertible virtual money. According to SEC, XRP was not registered as security during its launch, but it has been used as security till now. Stuart promises that Ripple will respond to all the SEC’s allegations in the coming weeks.
In response to stakeholders’ request seeking Ripple’s reaction to the indictment, he explained that it is a lengthy procedure. He reiterated that Ripple’s legal team would counter all the “false and unproven” allegations raised by SEC in the court.
Some of the allegations against Ripple
The SEC accused Ripple of selling more than 14 billion units of XRP for more than $1.3 billion surreptitiously to finance its operations and Larsen and Garlinghouse. This, in the commission’s claim, is against the law as Ripples failed to register the sales of the asset.
Related to that is Ripple’s failure to inform its investors of the covert sales of the assets. Instead, Ripple only shared information with the two companies and insiders involved in the deals. Despite receiving legal advice on XRP’s status as an investment contract, Ripples has ignored the legal opinion since 2013.
Meanwhile, Coinbase, which is regarded as the most reliable platform for trading cryptocurrency, has suspended the trading of XRP from its platform following the SEC’s lawsuit. However, customers will be able to gain access to their XRP wallets as the suspension won’t affect the asset’s deposit and withdrawal. In a related development, US banks have shunned XRP as a means of cross-border movement of money. Ripple had urged banks to adopt XRP as their preferred choice of the transnational movement of funds in the past.