Crypto Exchanges Discussed XRP's Status With SEC Ahead of Listings, Ripple Says

The SEC did not tell crypto trading platforms it viewed XRP as a security, Ripple claimed in a new filing.

AccessTimeIconMar 5, 2021 at 11:34 a.m. UTC
Updated Aug 19, 2021 at 7:46 a.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

XRP market participants, including crypto trading platforms, discussed the cryptocurrency’s regulatory status with the U.S. Securities and Exchange Commission (SEC) prior to listing the asset, Ripple said in a new filing Thursday night.

The payments and remittances startup closely associated with the XRP cryptocurrency filed its response to an amended SEC complaint alleging Ripple violated federal securities laws. Ripple continued to deny each of the SEC’s claims in a paragraph-by-paragraph rebuttal reminiscent of the tactic messaging platform Kik used when it faced the SEC two years ago. 

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • Much of the response resembled Ripple’s first answer, filed at the end of January, to the SEC’s original complaint, which the regulator brought at the end of 2020. The SEC filed an amended complaint in mid-February, 

    As it had in January, Ripple said it reserved the right to file a motion to dismiss the complaint at a future point. 

    In its new response, the San Francisco-based startup continued to argue that XRP is not a security and that it had not violated federal law in selling XRP over the past eight years. Many of the new additions to the response addressed statements the SEC added about documents the regulator believes support its case that Ripple should have known its sales may have been securities transactions.

    The new response also leaned more heavily on claims that crypto trading platforms discussed whether to list XRP with the SEC in previous years. One unnamed company, referred to as “Platform A,” reportedly “evaluated XRP’s regulatory status in light of prior SEC guidance and actions.”

    “Platform A met with SEC staff in the Division of Corporation Finance and Division of Trading and Markets, including at least one senior SEC staff member who previously met with Ripple on multiple occasions during investigation-related meetings in 2018, about the legal status of XRP and sought guidance on whether the SEC staff considered XRP a security,” the response said. 

    While Ripple did not name the platform, Coinbase is perhaps the most prominent U.S.-based crypto exchange that listed XRP in early 2019.

    Ripple said the unnamed platform was not told the SEC considered XRP to be a security, and listed the asset after that conversation. 

    Coinbase has since suspended trading due to the ongoing SEC suit, alongside numerous other exchanges operating in the U.S. Ripple claimed that has cost XRP holders roughly $15 billion during the past few months.

    The price of XRP plunged dramatically after the suit was first announced by Ripple, dropping from near 60 cents to around 27 cents. It has since breached the 60 cent level again, and was trading closer to 45 cents at press time.

    XRP's price fell after the SEC suit was first announced.
    XRP's price fell after the SEC suit was first announced.

    Ripple CEO Brad Garlinghouse and Chairman Chris Larsen are both named as defendants, and in a pair of letters dated March 3, both told District Judge Analisa Torres of the Southern District of New York that they may file to dismiss the charges against them as individuals.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.