The very first no-action letter in the crypto and blockchain space from the United States Securities and Exchange Commission (SEC) was issued earlier in the month. However, seeing that Ripple’s XRP finds itself in the same circumstance, the question now is whether the commission will also issue a similar letter. A no-action letter is one which exonerates a company from any legal action, and it is issued by a government body. A private jet service blockchain startup named TurnKey Jets recently received this letter.
XRP is currently facing charges as some of its token holders have sued Ripple Inc under the belief that the cryptocurrency is being controlled by the company. The accusers pointed out that XRP behaves more like Ripple’s stocks, which qualifies it as a security, rather than a regular cryptocurrency.
After series of arguments were made in court, the case was transferred to a federal court last year November after the Ripple team argued that a federal court best handles the case leveled against them. Citing reasons for the move, the defendant mentioned the fact that the suing class is made up of over a hundred members. Besides, roughly one plaintiff hails from a state different from the defendants while the amount of money being sued surpassed a total of $5 million.
Is Ripple Really At Fault?
Ripple stated that “Plaintiffs do not allege that they lacked information about the nature of these transactions.” In spite of this, the plaintiff cries foul, insisting that Ripple Inc caused them a great deal of harm because of its failure to register the cryptocurrency as a security with the SEC as was required.
The plaintiffs have therefore refused to shift grounds, maintaining that XRP is a security and that both state and federal laws were breached by Ripple when it could not register the digital asset as security before presenting it as an offer to investors as well as promoting and selling it.
Ripple Stands a Chance
Speaking on the ongoing case between Ripple and XRP investors, Tex S Hodlem, a Twitter user, opines that the Ripple Inc will be issued a no-action letter by the commission.
No concrete fact exists to defend such a claim, yet surprises are known to happen in the crypto industry from time to time. If at all a no-action letter is issued by the commission, it will bring the lawsuit to a screeching halt, proving to everyone that XRP is not a security.