Ripple Compares XRP to Oil and Diamonds in Its Response to SEC’s Amended Complaint

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Fri, 03/05/2021 - 05:52
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Alex Dovbnya
Ripple denies creating XRP in its response to the SEC's first amended complaint
Ripple Compares XRP to Oil and Diamonds in Its Response to SEC’s Amended Complaint
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Ripple is stepping up its fight against the U.S. Securities and Exchange Commission.

The blockchain company has filed its formal response to the first amended SEC lawsuit, claiming that it “did not sell or distribute XRP as an investment contract.”   

It contends that the agency “ignores” and “mischaracterizes” the economic realities of the token that has recorded over 1.4 billion transactions globally.

Ripple general counsel Stu Alderoty says that Ripple is also looking forward to finding out more about the SEC’s meetings with market participants and its alleged failure to warn them about XRP’s security status.         

Ripple denies it created XRP

The SEC lawsuit states that Co-Founder (Jed McCaleb), Ripple Agent-1 (Arthur Britto), and Cryptographer-1 (David Schwartz) were responsible for minting 100 billion XRP tokens “at little cost.”

Ripple denies this allegation in its response despite Schwartz explicitly mentioning that people who created XRP were “pretty much the same people” who created Ripple in his tweet that was posted just months prior to the SEC lawsuit:      

The people who created XRP are pretty much the same as the people who created Ripple and they created Ripple originally to, among other things, distribute XRP.      

Ripple holding “a large percentage” of the cryptocurrency is similar to Exxon holding oil, according to the company’s most recent filing:

Many entities own large amounts of commodities and participate heavily in the commodities markets — Exxon holds large quantities of oil, De Beers owns large quantities of diamonds, Bitmain, and other Chinese miners own a large percentage of outstanding bitcoin.

Related
Ripple CEO to File Motion to Dismiss SEC Lawsuit

Ripple lacks information about the executives' token sales 

The company claims that it no sufficient information about the sales of their executives who have recently filed two separate letters to dismiss the lawsuit:               

Ripple lacks sufficient information to either admit or deny the allegations in paragraph 186 as to Mr. Garlinghouse’s sales of XRP, and they are therefore denied.

Yet, it admits that Ripple’s employees “observed the trading price and the volume” of the token:  

To the extent any response is necessary, Ripple denies the allegations, except admits that Ripple employees at times observed the trading price and volume of XRP.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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