Ripple, and its XRP cryptocurrency, has been at the center of several contentious debates over the years. Mostly surrounding how the digital currency is classified and how the company manipulates holdings, the negative actions have been a major factor in keeping XRP suppressed. One such action is a lawsuit filed against the company in California last year by a group of investors after they lost their money due to XRP’s fall in price; but that lawsuit should be thrown out, according to Ripple.
The investors claim that Ripple was offering unregistered securities through XRP and use this as the basis for their lawsuit. Ripple has repeatedly asserted that this isn’t the case, but it isn’t using this as justification for requesting dismissal of the lawsuit. Instead, the company suggests that the investors waited too long to file their suit and that the statute of limitations has expired.
In the lawsuit, the plaintiffs highlight Ripple’s first XRP sale from 2013. Ripple is arguing that, per the Securities Act of 1933, lawsuits of this kind must be filed within three years; since five years had passed before the suit was initiated, there is no legal footing upon which the investors can stand. Ripple adds:
The crux of these claims is the false assertion that XRP is not a currency, but rather a security. In fact, as recognized by the U.S. Departments of Justice and Treasury in 2015, XRP is a ‘convertible virtual currency.’ It is correctly characterized as a currency under applicable law and, as such, need not be registered as a security under federal and state securities regulations.
In the US, the Securities and Exchange Commission (SEC) has already decided that certain digital assets, such as BTC and Ether (ETH) are not classified as securities. However, it hasn’t yet specifically categorized the standing of XRP. On the other hand, UK regulators mentioned in August that they believe XRP to not be a security. The Financial Conduct Authority explained at the time, “Tokens may have mixed features that may overlap with the above categories, or change over time. For example, Ether can be used as a means of ‘payment’ (exchange token) on the Ethereum platform, and can also be used to run applications (utility token). XRP has similar features.”
The request for dismissal can be found on Scribd. It was just filed last week and Ripple indicates that it will make a formal request for dismissal in front of a judge in January of next year.
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