The Ripple Legal Battle: Is XRP a Security Token or Not? | BTCMANAGER
Bitcoin, Blockchain & Cryptocurrency News
According to news published by Fortune, September 20, Ripple, the company behind the cryptocurrency XRP asked a federal court to dismiss the class action that would claim XRP as security.
Security or not Security?
As informed by BTCManager in August 2019, a group of investors filed a complaint against Ripple with the Securities and Exchange Commission (SEC) for dumping illegal securities on investors with the token.
The case is very relevant as it is not just Ripple caught in the crosshairs. Although the SEC has already exonerated Bitcoin and Ethereum from securities law, this time the focus is on other cryptocurrencies which, if considered as classic financial instruments, could expose companies like Ripple to various issues.
Ripple tries to justify itself in two ways: the first is relying on the opinion already expressed by the regulators who would consider XRP as a currency or commodity.
The second is based on an issue with timing; According to Ripple, the case cannot be prosecuted because it was filed too late as the law states that a company who sold securities cannot be charged if a period longer than 3 years passed since the sale of the security.
Effectively the sale of XRP began in 2013, however, the investors claim that the sale of XRP has never ended and is still “ongoing”. In response, Ripple defends itself by saying that investors have bought Ripple from secondary markets and not directly from the company which,