SEC: Ripple’s Stablecoin Plans Violate Law

The U.S. Securities and Exchange Commission (SEC) has labeled Ripple’s planned stablecoin as an “unregistered crypto asset.”

Unregistered Sales

According to the SEC, Ripple has been selling XRP, the digital asset used for the XRP Ledger, as an unregistered security since 2013. The agency claims that Ripple also intends to launch a new token that would fall under the same classification.

SEC’s Reasoning

The SEC argues that even if Ripple had not violated the law since 2020, another violation could still be “anticipated.” The agency cites Ripple’s past sales of XRP to institutional buyers as evidence of security offerings.

Ripple’s Stablecoin Plans

Last month, Ripple announced plans to launch a new stablecoin on Ethereum and the XRP ledger. The dollar-pegged asset, which has not yet been named, will be backed by cash and other cash equivalents. Ripple plans to expand the stablecoin to other blockchains in the future.

Legal Battle

The SEC first sued Ripple in 2020 for selling XRP as an unregistered security. While Ripple won a partial victory last year, the judge ruled that Ripple’s sales of XRP to institutional buyers were indeed security offerings.

XRP Price

At the time of writing, XRP is trading at $0.527, down 2.34% in the last 24 hours.