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SEC vs Ripple Labs: XRP price rises as court bid to dismiss lawmakers’ suit is filed

By Darius McQuaid

11:21, 20 September 2022

The US Securities and Exchange Commission (SEC) seal
Following news of the filing, XRP has risen by 8.53% – Photo: Getty Images

The United States Securities and Exchange Commission (SEC) and Ripple Labs, the company behind Ripple (XRP), have both filed motions for a summary judgement.

In December 2020 the SEC filed a lawsuit against Ripple, arguing that XRP was a security.

A summary judgement would mean that the lawsuit would not have to go to trial and instead ask District Judge Analisa Torres to make a ruling based on the arguments filed in documents.

The motions for a summary judgement were filed at the Southern District of New York.

Following this news, XRP rose by 8.53%, and was trading at $0.387 as of 20 September 2022, according to CoinMarketCap.

Ripple’s 20,000% increase in value

The SEC also claimed that Brad Garlinghouse, CEO of Ripple Labs, had led investors to believe they could make a decent profit from buying XRP as he had “touted XRP’s 20,000% increase in value and noted that Ripple was ‘just getting started’ in ‘investing in’ efforts for XRP.”

ETH/USD

3,486.66 Price
-0.170% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

DOGE/USD

0.13 Price
-7.650% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

66,006.60 Price
-3.250% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

SOL/USD

174.14 Price
-5.220% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

Ripple Labs stated that there is no evidence that those who purchased XRP would expect that level of profits from Ripple.

Ripple maintains that XRP does not meet the requirements of the Howey Test, which is a way to assess if a transaction qualifies as an “investment contract” and is considered a security.

On 18 September 2022, Garlinghouse tweeted that the SEC filings “make it clear the SEC isn’t interested in applying the law.”

Ripple stated SEC had ‘muddied the regulatory waters for crypto’

In June 2022, the SEC was accused of “deliberately muddying the regulatory waters for crypto” by Stuart Alderoty, general counsel at Ripple.

Alderoty argued, in an article he wrote for Fortune, that to “unlock crypto’s true potential” of building “a more inclusive and open financial system,” the “regulatory sludge” of the SEC needs to be cleaned up.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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