Ripple has filed its response to the SEC’s complaints; Ripple Labs Inc filed its response and also filed a Freedom Of Information Act request.
In Ripple’s response to the complaints, Ripple provides an answer to each of the complaints the SEC had against Ripple Labs inc and its co-founders Brad Garlinghouse and Chris Larsen. The group is primarily arguing that XRP cryptocurrency is not a security.
“XRP performs a number of functions that are distinct from the functions of “securities” as the law has understood that term for decades. For example, XRP functions as a medium of exchange — a virtual currency used today in international and domestic transactions — moving value between jurisdictions and facilitating transactions. It is not a security and the SEC has no authority to regulate it as one”, said Ripple in its opening statement.
The team goes on to offer even more reasons–93 pages worth of reasons–why XRP is not a security and why its sale did not constitute an unregistered securities offering.
Throughout the letter, the Ripple Labs team makes many comparisons to Bitcoin (BTC) and Ethereum (ETH) and asks for clarity regarding why both of those digital currencies, especially ethereum, are not considered securities even though ethereum’s initial offering has so many similarities to Ripple’s initial offering.
Freedom of Information Act
That being said, Ripple has filed a Freedom of Information Act request to learn why Ethereum is not considered a security even though the XRP and ETH initial sales had a similar structure. A Freedom of Information Act request enables the party that files the request to access federal documents and information related to an incident. Specifically, Ripple Labs is looking to learn more about the communications between the SEC and Ethereum Foundation that led the SEC to conclude that ETH was not a security.
It will be interesting to see if Ripple Lab’s continuous mention of ethereum and the Ethereum Foundation will lead to the Ethereum Foundation and the ETH ICO being re-examined by the SEC. We should wait and see.