SEC Identifies Upcoming Ripple Stablecoin as Unregistered Crypto Asset

Ripple’s highly anticipated stablecoin, though not yet launched, has already received a classification from the U.S. SEC as an “unregistered crypto asset,” according to the regulatory agency’s response to Ripple’s opposition to its opening remedies brief. The SEC has also shed light on Ripple’s history of selling XRP as an unregistered security. Since 2013, Ripple has been involved in unregistered sales of XRP, and it is now planning to issue a stablecoin that falls under the same classification. The SEC has highlighted that Judge Analisa Torres determined that Ripple’s sales of XRP to institutional clients constituted investment contracts. Ripple has not disputed that all its post-complaint institutional sales were in violation of the law. This development has raised reactions within the XRP community, with some feeling that the SEC is attempting to introduce additional regulations. In April, Ripple announced its plans to enter the stablecoin market and launch a stablecoin on the XRP Ledger and Ethereum networks later this year. The company aims to bridge the gap between traditional finance and the crypto sector, but some believe that the motive behind the stablecoin goes beyond this fusion. It has been suggested that Ripple intends to cater to its U.S.-based ODL partners by offering a stablecoin for cross-border settlements instead of XRP. The SEC is seeking a permanent injunction on Ripple’s future ODL-related XRP sales to prevent further violations of federal securities laws. If granted, Ripple would still be able to offer ODL services in the U.S., but clients would use their forthcoming stablecoin instead of XRP.