The lawsuit between Ripple and the Securities and Exchange Commission (SEC) just keeps heating up. Ripple has now put in a request with the agency to view documents determining its decisions to allow both bitcoin and Ethereum to be exempt from securities statuses through what’s known as a “Freedom of Information” request.
Ripple: What Makes Us So Unique, Huh?
Here’s a little background on the situation. Ripple is being charged by the SEC for hosting an improper token sale back in 2013. According to the financial agency, its primary cryptocurrency XRP is a security, and thus should have been registered as such. As Ripple failed to take the proper steps, it is out of order and must be disciplined to correct its actions of roughly eight years ago. It is estimated that Ripple made well over $1 billion through the token sale.
However, the company explains that XRP is not a security; that it has been deemed a valid currency by several leading monetary agencies in both the United States and abroad, and thus the ruling set forth by the SEC is false. Either way, this is gearing up to be one of the biggest crypto-related court cases in the history of the space, and XRP’s price is continually suffering as a result.
Now, Ripple is requesting any letters between Vitalik Buterin and Joe Lubin – the creators of Ethereum – and members of the SEC. It is also asking for letters sent by members of Congress and former SEC chairman Jay Clayton to see how the firm’s past determinations could potentially be used to show how Ripple is exempt from the agency’s governance.
In a court document, Ripple states:
The SEC’s filing, based on an overreaching legal theory, amounts to picking virtual currency winners and losers as the SEC has exempted bitcoin and ether from similar regulation.
Ripple’s requests are legal and valid through what’s known as the Freedom of Information Act (FOIA). The law is designed to ensure all government-based information remains transparent and available to members of the public. The Act is frequently utilized by journalists to obtain information for stories regarding what’s happening behind congressional doors.
No Contracts Were Ever Established
As determined in the past, bitcoin is a commodity and is therefore under the monitorization of the Commodity Futures Trading Commission. By contrast, Ethereum may have come about through a token offering, but has since undergone so many changes that it was determined not to be a security back in 2018, a move that was strongly welcomed by members of the trading community.
Ripple is denying that any investment contracts were ever established through the token sale it hosted in 2013. Furthermore, executives say they never made any claims that purchasing XRP would ever garner investors stakes in Ripple itself. Thus, it cannot fall into the securities category.