SEC Lawsuit Has Not Affected Ripple’s Business in Asia
- While exchanges in the U.S. have decided to delist XRP, Ripple’s business in the Asia Pacific region continues to grow, thanks to “regulatory clarity”.
- The firm has already moved to file a motion to dismiss the SEC lawsuit, arguing that FinCEN had previously classified XRP as a virtual currency.
Ripple CEO Brad Garlinghouse onstage during the LeWeb Paris 2013 conference, 11 December 2013. LeWeb Paris
While some exchanges have decided to delist XRP amid Ripple’s $1.3 billion lawsuit with the U.S. SEC, it’s business in the Asia Pacific region continues to “grow”, Reuters reported on 5 March.
Ripple’s troubles with the Securities and Exchange Commission (SEC) has resulted in its business suffering in the U.S., with several exchanges delisting its native XRP token. During an interview with Reuters, Ripple’s CEO Brad Garlinghouse said the “regulatory clarity” in Asia and Japan allowed his company to grow its business there, adding that to his knowledge no exchanges outside the U.S. have halted XRP trading. Garlinghouse said in a statement:
“It (the lawsuit) has hindered activity in the United States, but it has not really impacted what’s going on for us in Asia Pacific. XRP is traded on over 200 exchanges around the world. It’s really only three or four exchanges in the United States that have halted trading.”
In fact, quite a few firms in the Asia region have been friendly with Ripple, with the CEO of SBI Holdings, Yoshitaka Kitao, coming to the company’s defence immediately after the SEC lawsuit was announced, saying that “Japan’s FSA has already made it clear that XRP is not a security”. SBI has continued to support Ripple through its hard times, and has even allowed its users to lend their XRP through its cryptocurrency-related subsidiary, SBI VC Trade.
The SEC lawsuit has alleged that Ripple — its CEO Brad Garlinghouse and co-founder Christian Larsen — have raised more than $1.3 billion in an “unregistered, ongoing digital asset securities offering” since 2013. Ripple has already moved to file a motion to dismiss the SEC lawsuit, arguing that the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has already classified XRP as a virtual currency.
While all this is happening, Ripple has continued to expand its offerings around the globe. On 3 March, the firm announced the launch of a CBDC Private Ledger pilot, aimed at helping central banks issue and manage CBDCs.
- A federal judge ruled that the sale of XRP through exchanges and algorithms did not qualify as selling securities, which could have a major impact on several SEC lawsuits.
- The institutional sale of the token, however, did violate federal securities laws, and the lawsuit between the SEC and Ripple will have to go to trial.
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- These documents are seen as central in Ripple’s battle against the SEC, which in 2020 accused the company of selling its XRP token without registering it as a security.
- The documents in question are internal emails, text messages, and expert reports that followed Hinman’s 2018 speech, in which he said ETH and BTC were not securities.
- The exchange argues that the SEC failed to provide a “fair notice” that selling XRP was illegal, and that it previously made public statements that those transactions were lawful.
- Coinbase also pointed out that the SEC is yet to provide clear guidance to crypto businesses, and that it keeps being inconsistent about its enforcement approach.