August 9, 2022

XRP purchasers back Ripple, arguing that it is not a security

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On Dec. 22, 2020, the United States Securities and Exchange Commission filed a complaint against Ripple Labs. The complaint essentially alleged that Ripple had engaged in a multi-year, sustained practice of illegally selling unregistered, non-exempt securities in the form of its XRP tokens. 

This complaint, having been filed on the last day of former SEC Chairman Jay Clayton’s tenure at the commission, led to a considerable volume of public commentary, as is not unusual for SEC litigation against major players in the crypto space. What is unusual about SEC versus Ripple is the reaction from a sizable segment of XRP purchasers.

Related: SEC vs. Ripple: A predictable but undesirable development

On Jan. 1, 2021, a group of XRP purchasers led by attorney John Deaton filed a petition seeking a writ of mandamus in the District of Rhode Island, asking the court to force the SEC to exclude their XRP tokens from the pending litigation against Ripple on the grounds that the plaintiffs had not purchased investment contracts. The petition argues that the SEC, under the leadership of then-chairman Clayton, abused its authority on a politically-motivated vendetta against Ripple. Title: XRP purchasers back Ripple, arguing that it is not a security
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Published Date: Sun, 21 Mar 2021 14:07:00 +0000

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