The U.S. Securities and Exchange Commission (SEC) has stated in a recent court filing that Ripple Lab’s upcoming stablecoin is considered an “unregistered crypto asset.”
According to the regulatory agency, Ripple has been selling XRP, the digital asset used for the XRP Ledger, as an unregistered security since 2013. Furthermore, the SEC claims that Ripple plans to launch a new token that would also qualify as an unregistered security.
“Ripple’s main business has consistently been the unregistered sales of XRP since 2013. They also intend to introduce a new unregistered crypto asset. The Court has already determined that Ripple’s institutional sales through ODL (on-demand liquidity) until 2020 are in violation of the law… Even if Ripple hasn’t committed any violations since 2020, another violation can still be expected under the law.”
Last month, Ripple announced its plans to launch a new stablecoin on the Ethereum (ETH) and XRP ledgers. The dollar-pegged digital asset, which has yet to be named, will be fully backed by cash, short-term US government treasuries, and other cash equivalents, according to Ripple.
Ripple also revealed that the stablecoin will be available on other blockchains, although it did not specify which ones.
The SEC initially sued Ripple in 2020, accusing the company of selling XRP as an unregistered security. Last year, Ripple achieved a partial victory against the SEC when a judge ruled that the firm’s open-market sales of XRP did not qualify as security offerings, as the SEC had claimed. However, the judge did agree with the SEC’s argument that Ripple’s sale of XRP to institutional buyers constituted the sale of a security.
As of writing, XRP is trading at $0.527, reflecting a 2.34% decrease in the last 24 hours.
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