US SEC “Ripple Claims Legally Inappropriate”

[블록미디어 강주현 기자] The US Securities and Exchange Commission (SEC) said Ripple’s claim was “legally inappropriate.” On the 9th (local time), a cryptocurrency media outlet called YouToday said in a letter filed by the SEC to Judge Torisa, an analyst at the Southern District Court of New York, to dismiss Ripple’s defensive request.

SEC attorney George Tenleyro alleged that Ripple Labs was evading responsibility by handing over allegations of selling undocumented securities to an agent. Ripple Labs previously argued against the SEC’s revised complaint that the SEC did not inform exchanges that the sale of Ripple could be inappropriate and should not be traded. It also said that the SEC did not warn about Ripple’s regulatory situation while meeting with exchanges.

The SEC countered that Ripple’s claim was “legally inappropriate.” This is because the investigation process for Ripple was private, and there is no legal obligation to notify industry officials about the undisclosed investigation. Therefore, SEC argues that there was no need to inform the industry of possible violations of the law in advance.

The SEC said that the Ripple case was part of a howey test (a test to determine whether an investment was made or not, if judged as an investment, subject to securities laws) created by the US Supreme Court to determine whether a particular transaction was securities.

Ripple’s claim is invalid because the term’investment contract’, which has been precedent over decades, is ambiguous. YouTube said several district courts specifically dismissed these claims more than once in order to apply the subtest.

The SEC added that “Ripple capitalized its business by selling digital asset securities.” Ripple claims that it capitalized on its business by selling securities to the public and at the same time promoting that profitability could be increased later by the company’s actions.

Although the U.S. Financial Crimes Enforcement Network called Ripple a cryptocurrency, the SEC claims that this is because Ripple is distinct from traditional currency. The SEC said that just because the Financial Crimes Enforcement Network and Ripple agreed (it’s called virtual currency) doesn’t mean that they don’t have to comply with other regulations such as the Securities Act. YouTube interpreted it as “just because other regulators said something couldn’t stop the SEC from being regulated.”