Court Rejects Ripple Investor Tetragon’s Claim of XRP Being Determined a Security
“XRP is no more a security after the SEC filed the enforcement action than it was before it,” the judge said; the decision will be made by the District Court.
Ripple investor Tetragon Financial Group Ltd.’s claims that the US Securities and Exchange Commission (SEC) had officially determined the status of XRP has been rejected by the Court in Delaware. As such, “the SEC has NOT determined that XRP is a ‘security,’” says the San Francisco-based fintech startup.
Earlier this year, the UK-based investment company with total assets of $2.32 billion sued Ripple, saying it seeks to “enforce its contractual right to require Ripple to redeem” Series C stocks held by Tetragon. At the time, Ripple said that the lawsuit had “no merit” as XRP hasn’t been declared security yet.
“But XRP is no more a security after the SEC filed the enforcement action than it was before it. A determination …resolves the question of whether XRP is a security. The enforcement action, by contrast, asks that question. The question is not yet resolved, so a determination has not yet been made. And when it is made, it will be made by the District Court.”
“The SEC is not the authority making the determination on this track is permissible under the agreement.”
Ripple called Tetragons’ lawsuit an “opportunistic move to take advantage of the SEC’s allegations,” which, of course, according to the company, is “dead wrong.”
In a separate case, which was brought on by the XRP holders against the agency, SEC acknowledged that it had not made any determination as to XRP’s status. Also, the Court presiding over the SEC’s case is “the exclusive method for testing the validity” of those allegations against Ripple. Ripple said,
“We look forward to bringing the SEC’s case to a just and speedy resolution, and remove the cloud that the SEC’s misguided actions have cast over the XRP market.”