In 2020, the U.S. SEC accused Ripple and its co-founders of breaching securities laws by selling its native cryptocurrency XRP without first registering it with the SEC.
Jakub Porzycki | Nurphoto | Getty Images
U.S.-based cryptocurrency company Ripple says it’s planning to fight the ongoing lawsuit with the U.S. Securities and Exchange Commission “all the way through.”
“We are planning to continue to fight the case all the way through,” Monica Long, Ripple’s president, told CNBC on Monday.
The lawsuit between Ripple and the SEC has stretched for nearly three years.
In 2020, the SEC accused Ripple and its co-founders of breaching securities laws by selling $1.3 billion of its native cryptocurrency XRP without first registering it as a security.
Ripple disputed the claims, insisting XRP cannot be considered a security and is more akin to a commodity. In July, a landmark ruling by U.S. District Judge Analisa Torres determined the token was not necessarily a security.
“We also got clarity in that lawsuit. And the judge’s order in that case said very clearly XRP in and of itself is not a security, which kind of opens the doors to us to really expand our business — not just in the U.S. but even more globally,” said Long.
Ripple is not alone. Other crypto companies, including Binance and Coinbase, are also currently embroiled in lawsuits with the SEC.
Crypto leaders have slammed the U.S. government and its approach to regulation, particularly for the lack of clarity.
Coinbase and Ripple, as well as other crypto firms, have threatened to leave the U.S. in response to the SEC’s crackdown.
Weeks after Judge Torres’s ruling, U.S. District Judge Jed Rakoff, also sitting in the Southern District of New York, ruled that “the Court rejects the approach recently adopted by another judge of this district in a similar case.”
The SEC requested to file a motion for appeal to challenge the landmark ruling by Judge Torres, saying “‘programmatic’ offers and sales of XRP over crypto asset trading platforms could not lead investors to reasonably expect profits from the efforts of others.”
The SEC has requested permission from Judge Torres to file an interlocutory appeal, but the matter has yet to be decided.
Ripple’s legal team said in a filing the SEC’s request for an appeal largely stemmed from “dissatisfaction” with the judge’s ruling that the XRP token did not qualify as a security for sales to retail investors.
Ripple’s president told CNBC the company is seeking to “operate above board” and comply with regulators. In June, Ripple received in-principle approval to offer regulated crypto services from the Monetary Authority of Singapore.
“We’ve always been very engaged with regulators, policymakers, and it’s just a part of our DNA. When we build [a] product, compliance is in the room. They have a seat at the table,” said Long.
On Friday, Ripple said it will acquire crypto infrastructure startup Fortress Trust for an undisclosed sum. This follows its acquisition of Swiss crypto custody services firm Metaco in May.
“So the point on trust, we totally appreciate that to be a player in finance, and we’re now a regulated financial services provider with these licenses,” said Long. “You got to always operate above board.”
— Correction: This story has been updated to accurately reflect that the SEC requested permission to file an interlocutory appeal, but the matter has yet to be decided. In addition, a paragraph about Judge Rakoff’s ruling was added for clarification.
