Crypto has taken a shellacking over the course of the year with flagship BTC priced at 19,123.10 and ETH at 1,283.04. Both down considerably from their peak high almost a year ago. With speculation swirling about whether crypto will have a return to form, there is one cryptocurrency that many are banking on… literally. Ripple Labs Inc has been locked in battle with the SEC for nearly 2 years over their XRP coin. The outcome of this battle is said to have far reaching effects on the crypto industry as a whole and the life of XRP. The latest revelation in this battle is a Wednesday filing by I-Remit, a payment processor, siding with Ripple Labs. Let’s discuss.
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As I mentioned I-Remit is siding with Ripple and XRP urging a New York federal judge to side with Ripple Labs Inc. in its efforts to beat a U.S. Securities and Exchange Commission enforcement action, arguing the fact that I-Remit customers use Ripple's digital token to send money abroad cuts against the SEC's claim that the token is an unregistered security. The payment processor argued that the SEC is wrong in its belief that Ripple's digital token, XRP, is an investment contract and that "the principal reason for anyone to buy XRP was to speculate on it as an investment."
I-Remit is one of many companies using XRP for cross-border fund transfers daily. That should be proof XRP is not a security and holders of the coin should not expect the value to increase over time according to I-Remit.
"The way in which entities like I-Remit use XRP on a daily basis undermines the SEC's theory of the case," the brief states. "XRP provides a digital currency with benefits not achievable through traditional governmental currencies. XRP is best understood as a means of value exchange, not an investment. It should not be regulated as an investment under the Securities Act."
Despite the enforcement actions of the SEC, more than 100 banks have joined RippleNet, the network that allows the processing of cross-border payments in real-time and with little cost. 6 of the biggest banks on the Ripple’s network are PNC Bank, Santander Bank, Standard Chartered Bank, Cuallix, Skandinaviska Enskilda Banken (SEB), and Mitsubishi UFG. Additionally, many foreign central banks have aligned themselves with Ripple.
The Canadian Imperial Bank of Commerce (CIBC) and Israel’s Bank Leumi, recognized small business banks, are now using the Ripple payment network for cross-border transactions as a result of their alliance with the National Australia Bank.
The large Australian bank stated: “We’re excited to be working with CIBC and have already partnered with them in using Ripple’s blockchain technology to complete international payments transfers between our banks as a proof of concept.”
In spite of these breakthroughs and monumental adoption of Ripple, the SEC maintains Ripple's CEO Brad Garlinghouse and chairman Christian Larsen were reckless in believing that XRP would not be considered a security by regulators and that Ripple had "fair notice" that XRP would be subject to the SEC's jurisdiction.
According to Ripple the enforcement action came after nearly a decade of regulatory uncertainty surrounding cryptocurrencies, and that the SEC failed to demonstrate that XRP is a security while other decentralized digital assets, such as bitcoin and ether, are not.
In January, Ripple won access to a small slice of a trove of SEC documents the agency claimed were privileged. U.S. Magistrate Judge Sarah Netburn ordered the SEC to give Ripple a selection of handwritten notes agency staffers took during certain meetings with third parties unrelated to Ripple, as well as an emailed draft of a June 14, 2018, conference speech in which SEC Division of Corporation Finance Director
