A couple of key memos in the legal brawl between Ripple and the SEC finally became public Friday. Ripple immediately claimed victory in the disclosure, though the language in the controversial documents raised questions about the company's arguments.
Ripple General Counsel Stuart Alderoty said the memos proved the company received legal advice in 2012 that XRP, the cryptocurrency Ripple uses for its payment network, would not be considered a security by regulators. The SEC sued Ripple in 2020, arguing that XRP is not a currency but a security, and therefore subject to strict securities laws.
“We are pleased with the Court’s order to release these documents to the public,” Alderoty said in a statement. “The documents show a ‘compelling’ legal analysis that Ripple received in 2012 that XRP is not a security.”
Alderoty also argued that “the fact that Ripple sought such advice in 2012 should be applauded. That fact that it took the SEC eight years to suggest they disagreed with that analysis — while XRP traded in a massive global market — is baffling.”
The SEC could not immediately be reached for comment. The regulatory agency had earlier argued that the memos would show that Ripple was aware that the XRP could be considered as a security under federal law, according to a Reuters report.
The SEC’s position appeared to be supported by one of the memos dated Oct. 19, 2012, in which Ripple's lawyers told the company, “Although we believe that there is a compelling argument can be made that Ripple Credits [as XRP was referred to in the document] do not constitute ‘securities’ under the federal securities laws, given the lack of applicable case law, we believe that there is some risk, albeit small, that the Securities and Exchange Commission disagrees with our analysis.”