SEC Labels Ripple’s New Stablecoin as Unregistered

The proposed stablecoin by Ripple Lab would be categorized as a “unregistered crypto asset,” according to a new court filing by the U.S. Securities and Exchange Commission (SEC). This development adds another level of complexity to the current legal dispute between the two organizations.

The digital asset connected to the XRP Ledger, XRP, has been sold by Ripple as an unregistered securities since 2013, according to information provided by the SEC. The regulatory body also mentioned Ripple’s plans to introduce new coin, which would likewise be considered an unregistered security.

Legal Implications and Concerns

The court filing emphasized that despite any compliance measures taken by Ripple since 2020, the potential launch of a new token raises concerns about future violations of securities law.

Recently, Ripple made public its intentions to launch a new stablecoin on the XRP ledger and Ethereum (ETH). It is anticipated that the unnamed stablecoin would have complete backing from cash and short-term US government treasuries, among other comparable assets.

2020 saw the SEC file a lawsuit against Ripple, claiming that XRP had been sold as a securities without authorization. Even while Ripple won part of the battle last year when a judge decided that its open-market XRP sales did not qualify as security offerings, the court accepted the SEC’s argument that selling XRP to institutional customers was against securities laws.