- The U.S. Securities and Exchange Commission (SEC) has classified Ripple Lab’s upcoming stablecoin as an “unregistered crypto asset.”
- Ripple has been accused of selling XRP, the digital asset used to operate the XRP Ledger, as an unregistered security since 2013.
- Ripple plans to launch a new token that would also be an unregistered security, according to the SEC.
The SEC has deemed Ripple Lab’s proposed new stablecoin as an “unregistered crypto asset,” adding to the ongoing legal issues faced by the company. The regulatory body also maintains that Ripple has been selling XRP as an unregistered security since 2013.
Ripple’s Ongoing Legal Battle with the SEC
The SEC has been in a legal battle with Ripple since 2020, accusing the firm of selling XRP as an unregistered security. Ripple was handed a partial victory last year when a judge ruled that the firm’s open-market sales of XRP do not qualify as security offerings. However, the judge did agree with the SEC that Ripple selling XRP to institutional buyers qualified as selling a security.
Ripple’s New Stablecoin
Ripple announced last month that it plans to launch a new stablecoin on Ethereum (ETH) and the XRP ledger. The dollar-pegged digital asset, which has yet to be named, will be fully backed by cash, short-term US government treasuries, and other cash equivalents. Ripple also stated that the stablecoin will find its way to other blockchains, but did not specify which.
SEC’s Stance on Ripple’s New Stablecoin
The SEC, in a new court filing, has stated that Ripple’s new token would also be an unregistered security. The regulatory body has maintained that Ripple’s primary business continues to be unregistered sales of XRP and that it also plans to issue a new unregistered crypto asset.
Conclusion
The SEC’s latest classification of Ripple’s proposed new stablecoin as an unregistered crypto asset adds another layer to the ongoing legal issues faced by the company. As Ripple continues to navigate these legal challenges, the future of its new stablecoin remains uncertain.
