The central theses
- The SEC claims Ripple has been lobbying related to the public perception of XRP.
- Such lobbying efforts have been used to create a legal representation of XRP that is in Ripple’s own interests, according to the SEC.
- According to the SEC, evidence of lobbying XRP perception is being used to counter Ripple’s defense against fair terminations.
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A new development in Ripple’s ongoing legal process.
New twist against ripple
As part of its ongoing lawsuit against Ripple, the Securities and Exchange Commission (SEC) alleges the company attempted to influence public perception of XRP.
In a new letter to Judge Sarah Netburn, SEC attorney Jorge Tenreiro has stated that the agency is looking for new evidence of Ripple’s “lobbying efforts” regarding XRP. The SEC claims Ripple was trying to sway the public’s mind about whether or not XRP was a security.
The crux of the case against Ripple is whether its XRP token is a security. The SEC filed a lawsuit against Ripple in December alleging the company raised $ 1.3 billion from the sale of unregistered securities.
The regulator has asked Ripple to submit new documents showing that the company has made efforts to change the public’s perception of the regulatory status of XRP.
In the letter, the SEC’s attorney noted that the investigation shows that Ripple was lobbying related to XRP. It is reading:
“Ripple is relying on statements this official paid for to support his litigation position.”
According to the document, Ripple added former CFTC chairman Chris Giancarlo to his payroll, who made a statement after joining the company in June 2020 that XRP is not a security. After making the statement, the price of XRP also rose quickly.
The document also notes that further lobbying evidence will be used to counter Ripple’s affirmative defense that the company should have received a “fair notice” from the SEC before legal action could be taken. In other words, the SEC argues that when the company looks for funding measures to change the public’s perception of XRP, it shows that it was already aware of the questionable legality of its XRP sales.
Such lobbying efforts were used to gather testimonies from public figures and used by the company’s public relations team to create a legal representation of XRP that would serve its own interests, the SEC claims.
Prior to the lawsuit, Brad Garlinghouse, CEO of Ripple, also alleged the defendant in the case that the SEC’s legal action against the company was causing confusion among market participants about the legality of XRP. In response, the SEC is now claiming that it was the company that caused the confusion and is using it to aid in its defense against fair layoffs. The agency wrote:
“Since Ripple has questioned the alleged lack of a” fair termination “based on the beliefs of market participants, the SEC is entitled to examine whether the alleged confusion was bought and paid for by Ripple rather than reflecting real market sentiment. ”
Within the same document, the SEC has filed a new request for an additional investigative process. As part of this separate application, the agency would like to make six additional deposits from people associated with the company who have specific knowledge regarding XRP sales. These people are five former Ripple employees and Christian Gil, the co-founder of the trading company GSR, who carried out market-making on behalf of the executives of Ripple.
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