Ripple slams latest SEC legal motion: ‘It had no business bringing this litigation’
08:44, 6 October 2022
Ripple Labs, the issuer of the cryptocurrency XRP, has attacked the US Securities Exchange Commission (SEC) for trying to stop two companies from filing amicus briefs in the long-running court case over whether XRP is a security.
TapJets, a private jet hire company, and the remittance company I-Remi, which both accept XRP for their services, moved to share their amicus briefs on the matter with the court currently hearing the SEC’s case against Ripple. The Latin term refers to a person or entity which is not a party to a legal case, but which is allowed to submit a brief to influence the court's decision.
TapJets said it accepted XRP as payment in order to make it possible to quickly book charter flights around the clock, when standard banking facilities are not available.
I-Remit, a Filipino remittance company, said it relied heavily on Ripple's on-demand liquidity (ODL) solution in dealing with remittences from Filipinos working abroad.
Ripple says the briefs refute the SEC’s claim that every purchase of XRP is an investment.
The SEC asked Federal Judge Analisa Torres to deny the requests of the two companies. to submit briefs in support of Ripple's motions for summary judgment, saying that .
But Ripple attacked SEC’s request, telling the SEC that if it had no way of verifying the two companies’ claims about their relationship with XRP, it had “no business bringing this litigation in the first place.”
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The SEC first challenged the security status of XRP in December 2020, when it opened the case against Ripple Labs and its executives for allegedly issuing unregistered securities.
The whole cryptocurrency industry is watching the case, as the ruling could set a precedent for whether cryptocurrencies can be deemed as securities bythe regulators.
TapJets, in its brief dated 26 September, wrote that it was an uninterested party in litigation and had no existing relationship with Ripple, financial or otherwise.
“TapJets’ interest in this case is as a business that accepts cryptocurrency, including XRP, in exchange for its services as a fiat-currency substitute. For TapJets, the acceptance of XRP as payment for services is vital in some instances: TapJets’ refers to this as the ‘Friday Night Problem’,” the brief said.
“The Friday Night Problem exists when a traveller wishes to book immediate travel but is unable to tender payment using traditional currency, usually because the booking occurs outside of normal banking hours. When banks are closed, money transfers via wires cannot be sent. (...) Because the inherent nature of cryptocurrencies circumvents the Friday Night Problem, TapJets accepts cryptocurrencies,” TapJets wrote.
However, the SEC, in a letter dated 4 October, wrote that TapJets and I-Remi “do not support their briefs with any evidence,” and therefore the SEC “would be prejudiced by being unable to evaluate the factual veracity of their claims or show that [the companies’] ‘facts’ are disputed.”
Representatives for Ripple argued in a letter dated 5 October that the SEC “mischaracterized both the briefs and the law when it claims that the amicus briefs of I-Remi and TapJets, and constitute improper attempts by Movants to offer evidence outside the constraints of discovery restrictions, the rules of evidence, and this court's prior order.
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‘No business bringing the litigation’
“Finally, the SEC remarkably suggests that it would be prejudiced by its inability to ‘evaluate the factual veracity of their claims or show that… ‘facts’ are disputed,” Ripple said.
“The SEC has sought summary judgment based on what it erroneously claims are undisputed facts that every purchase of XRP is an ‘investment’ and that every XRP purchaser expects profits from Ripple’s efforts.
“Nothing could be more to the point than these two amicus briefs refuting (or at least disputing) both points. If the SEC cannot evaluate the veracity of such claims then it had no business bringing this litigation in the first place.”
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