Ripple’s New Stablecoin Faces SEC Scrutiny
The U.S. Securities and Exchange Commission (SEC) recently filed a court document stating that Ripple Lab’s upcoming stablecoin is considered an “unregistered crypto asset” by the regulatory body. This move comes after the SEC accused Ripple of selling XRP, the digital asset used on the XRP Ledger, as an unregistered security dating back to 2013. The SEC also highlighted that Ripple intends to launch a new token that would fall under the category of unregistered securities.
Ripple’s Unregistered Sales
- Since 2013, Ripple has been engaging in unregistered sales of XRP, according to the SEC.
- The regulatory agency points out that Ripple plans to issue another unregistered crypto asset.
- In 2020, the courts determined that Ripple’s ODL institutional sales violated the law.
Ripple’s Stablecoin Announcement
Last month, Ripple disclosed its plans to introduce a new stablecoin that will operate on Ethereum (ETH) and the XRP Ledger. The stablecoin, which is yet to be named, will be backed by cash, short-term US government treasuries, and other equivalents. Additionally, Ripple mentioned that this stablecoin will be integrated into other blockchains, although specific details have not been provided.
Legal Battle with the SEC
- The SEC sued Ripple in 2020, alleging the sale of XRP as an unregistered security.
- Last year, Ripple secured a partial victory as a judge ruled that open-market sales of XRP did not constitute security offerings.
- However, the judge agreed that selling XRP to institutional buyers was a violation of security regulations.
Current Status of XRP
At the time of writing, XRP is trading at $0.527, showing a 2.34% decrease over the past 24 hours.
Hot Take: Shape of Ripple’s Regulatory Landscape
As Ripple navigates the complex regulatory landscape, the scrutiny from the SEC is a significant challenge for the company. Stay tuned for further developments and how Ripple aims to address these regulatory hurdles.
Sources: SEC Filing
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