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XRP Suits Up to Defend Charges From the SEC

XRP Suits Up to Defend Charges From the SEC
  • Ripple is gearing up for its pretrial for XRP’s SEC lawsuit.
  • Yahoo! Finance publishes a report speculating Ripple’s battle plan.
  • XRP is still facing its ban on trade in multiple exchanges.

Yahoo! Finance published a report speculating how Ripple plans to defend its coin, XRP, from the SEC’s lawsuit. The US regulator sued Ripple on grounds of selling XRP as a coin instead of a security offering.

Ripple on the other hand believes that the XRP token is separate from the company’s offering of setting up a cheaper and faster global money transfer system. Hence, they have already begun building their legal case ahead of the pretrial hearing set for Feb 22.

The report draws light to a possible strategy that Ripple may use to prove its argument. The company will compare the coin’s price value in times of its partners’ success. They will be drawing evidence over 8 years of data. This will show that the price of XRP hasn’t changed in relation to Ripple’s partnerships.

For instance, Moneygram has been partners with Ripple for a long time. Statistics prove that Moneygram has seen a shares increase of 170% in just a day after its alliance with Ripple. On the other hand, XRP’s price stayed ‘flat’ according to coin information sites.

However, by comparison, Ripple stands to argue that XRP did not see a massive positive effect as Moneygram did. This thereby proves that there is no connection between Ripple and the token XRP.

The SEC can argue still that XRP’s marketing was misleading. The reports marked the time XRP was referred to as ‘ripples’ by Ripple after its registration. Ripple can argue stating that their business is in providing global transfer payments and not in selling XRP.

Ultimately, the report thinks that the verdict will be decided on how the court rules based on the ‘Howey Test’. The SEC believes that this test will prove that XRP qualifies as a security.

In contrast, Ripple is hoping the ruling will be more flexible with this test. They feel that new ‘schemes’ in the markets should be subject to adaptability.

Meanwhile, XRP is still facing its ban on trade on most crypto exchanges including Coinbase and Kraken.

Read Also: Ripple Is Hiring Despite Lawsuit, XRP Holders File Appeal

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