The U.S. Securities and Exchange Commission is trying to treat the cryptocurrency XRP as a security even as it exempts Bitcoin and Ether from being regulated like stocks or bonds, XRP developer Ripple Labs Inc. said.
In a court filing Thursday, Ripple pushed back against the SEC, which had sued Ripple, its co-founder Christian Larsen and Chief Executive Officer Bradley Garlinghouse in December, claiming they deceived investors in XRP by selling more than $1 billion of the virtual tokens without registering with the agency.
The SEC can’t regulate XRP because it’s a medium of exchange — a virtual currency used in international and domestic transactions — not a security, Ripple said in its filing.
“The SEC’s filing, based on an overreaching legal theory, amounts to picking virtual currency winners and losers as the SEC has exempted Bitcoin and Ether from similar regulation,” Ripple said.
Attorneys for Larsen and Garlinghouse in separate letters Wednesday to U.S. District Judge Analisa Torres wrote that their clients anticipate filing a motion to dismiss SEC’s revised complaint.
The case is Securities and Exchange Commission v. Ripple Labs Inc., 20-cv-10832, U.S. District Court, Southern District of New York.
Read more: Ripple Labs, Executives Sued by SEC for Failing to Register XRP