Ripple executives Brad Garlinghouse and Chris Larsen recently denied all allegations levelled against them by the SEC, and requested the court to dismiss the complaint.
In a response to an amended allegations report from the SEC, the two also tried to establish that the two primary statutes defining a “security” in the law did not include digital assets.
SEC trying to send regulatory message to market
Ripple’s response also denied relief to the SEC regarding judgment or any other consolation. Garlinghouse and Larsen appealed to the court to dismiss the action and give judgment in favor of the accused.
Interestingly, the response filed by Garlinghouse mentions that SEC is seeking after-the-fact litigation. It pointed out that the commission has failed to grab this case by deliberative guidance and rulemaking. The defendant said that the SEC is trying to send a regulatory message to the market.
Garlinghouse alleged that the regulator is trying to create a new standard on how digital assets will be controlled in the country, a move in which the SEC has “gone too far.”
The reply tried to focus on how the commission is seeking to apply its own control and that too in a newly developing field without offering any clear guidance to the market. It also mentioned that the SEC is just attempting to gain a litigated victory with the support of unclear regulations.
The expense to create a new policy cannot come at the price of an Individual’s right, Garlinghouse said.
XRP not a securtiy
The defense raised and cleared the matter that the XRP token is not a security. Garlinghouse and Larsen have not violated Section 5 of the Securities Act as the token is not an ‘investment contract’ or a ‘security’. While it also added that neither of the defendants in the case alleged offers or sales or distributions of XRP are “investment contracts.” However, it also mentions that any kind of registration was not required d in connection with any offer or sale of XRP by an individual or Ripple.