Ripple Labs is concerned over the fact that instead of laying down concrete rules regarding cryptocurrency, the Securities Commission is enforcing unnecessary regulations. They feel that under the current administration, the agency is being hostile to the crypto world. Ripple has sent out a statement reaching out to the industry regulators and lawmakers to develop a proper regulatory framework and avoid ambiguity.
This fallout happened after the XRP token, which Ripple uses for payments, has been sued by the SEC for issuing an unregistered security. Ripple says that this kind of high-handedness will result in harm to innovation and hamper business growth. With this, plans are afoot by industry executives to undermine the SEC citing a major oversight under the stewardship of Gary Gensler. Moreover, their stance never had any sanction from Congress. Instead, Ripple is asking for a bigger role in crypto trading by the commodities Futures Trading Commission, which has a more friendly approach towards them.
There has been no comment from SEC thus far.
Ripple supports the proposal by Republican Commissioner, SEC, Hester Peirce to exempt crypto firms from securities rules stating they are built-out projects. In December 2020, SEC filed the lawsuit against Ripple, and this fight stands for a few key jurisdictional points that have hounded regulators. The ruling will have a far-reaching impact on not only XRP but also other digital coins.
XRP was released in June 2012 on a distributed ledger, and 100 billion tokens were created even before Ripple was formed, in September, the same year. Ripple received a gift of a substantial number of XRP s from the company, and Ripple owned around 60 billion XRP, with a major part held in escrow.
SEC also has allegations against Ripple of trying to harass them, asking for huge documentation and witnesses. Ripple feels the agency is unnecessarily creating a fuss, their legal theory is flawed, and it is Ripple that is positioned to lead the narrative. They say this fight is not just Ripple against the agency rather, they represent the whole industry.
