The American blockchain company Ripple continues its legal fight against the Securities and Exchange Commission (DRY). The fintech intends to build its legal strategy on the argument that its token, XRP, cannot be considered as a security in the absence of a contract binding the company to its investors. Indeed, in the context of the issuance of XRP, this “investment contract” which would grant rights to investors does not exist.
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The US regulator’s case against the company centers on the accusation that XRP is an unregistered security, a claim Ripple denies. In a new installment in the legal saga, the blockchain company has filed a motion seeking the dismissal of the lawsuit ahead of the trial that is expected to take place in federal court in Manhattan, Bloomberg reported.
Although the approach may prove to be effective from a legal point of view, some investors may find the position taken by Ripple worrying: indeed, by following this logic, those who buy its token are deprived of the rights that are normally granted to investors.
Earlier this month, both sides filed for a speedy judgment in the case between them, raising hopes among XRP investors that the company’s legal woes could be resolved relatively quickly. If so, this move is likely to drive up the price of its native token.
As the court documents submitted on September 18 indicate, Ripple and the SEC seek so-called summary judgment, which means that neither the plaintiff nor the defendant want the lawsuit to evolve into a full court proceeding.
“Documents filed today make it clear that the SEC is not interested in enforcement. It wants to rewrite the enforcement terms in an impermissible effort to extend its jurisdiction far beyond the authority granted to him by Congress,” tweeted Brad Garlinghousethe CEO of Ripple, on the day the documents were filed.
Stuart Alderotythe company’s legal director, added that, according to him, “after two years of litigation, the SEC is unable to identify any investment contract (this is what the law requires).”
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