The lawsuit filed by the Securities and Exchange Commission (SEC) against Ripple Labs has hit XRP investors particularly badly.
Since the announcement of the lawsuit, we have witnessed the listing of XRP on numerous cryptocurrency exchanges around the world for US customers and a massive outflow of investor capital. As a result, the XRP price fell more than 50% in less than 14 days.
However, not all XRP investors were silent about the SEC’s decision to file a lawsuit against Ripple as an illegal act. Several XRP investors filed a petition against the SEC and its new president, Elad Roisman, in the US Rhode Island District Court. In a total of 96 pages, petitioners summarize why XRP is not a security under US law.
XRP investors claim that the SEC’s decision fails to comply with its mission of “protecting investors, promoting fairness and sharing information about companies… helping investors make informed decisions and invest with confidence.” On the contrary, former President Jay Clayton did the opposite:
“As SEC chief, implementing the SEC mission statement was Jay Clayton’s (Clayton) fiduciary duty. Rather than sharing information to protect investors and help investors make informed decisions, the Defendant deliberately and deliberately lost billions of dollars to innocent investors who bought, traded, bought and / or acquired Digital Asset XRP, including the aforementioned Petitioners. ”
The petition also claims that the SEC has been inactive for more than 7 years. During this time, a solution could be reached with the managers. However, petitioners claim that this did not happen, so investors now suffer billions of dollars in “unnecessary” losses. According to the petition, Jay Clayton “acted for improper reasons” and caused irreparable damage to Ripple Labs and XRP.
Besides, one of the first arguments about why XRP is not a security is that the SEC classifies Bitcoin (BTC) and Ethereum (ETH) as non-securities. Petitioners claim that currently the fifth largest cryptocurrency by market capitalization is traded equally on hundreds of exchanges and is being used by about “150 third-party vendors as currency.”
In addition, Ripple has become “SWIFT’s biggest competitor”, offering instant cross-border payments using XRP. In this context, the petition also refers to Brian Brooks, Acting Currency Supervisory Office (OCC) Deputy, who publicly stated that the government should use existing private companies and technologies such as Ripple to replace the SWIFT system.