In a new development in the Ripple-SEC lawsuit, during a hearing on 19 March, the Commission’s trial attorney Jorge Tenreiro told Magistrate Judge Sarah Netburn that XRP cannot be compared to Bitcoin and Ethereum. Earlier this week, lawyers representing Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen asked Judge Analisa Torres to compel SEC to produce documents about Bitcoin and Ethereum.
While the regulatory authority claimed XRP is security, both Bitcoin and Ether have been deemed as non-security assets. But Ripple stated that “the economic substance” of its native crypto asset XRP’s transactions is no different from BTC and ETH.
During the hearing, SEC said that documents pertaining to two of the world’s largest crypto assets were not relevant to the case. Moreover, according to the commission Ripple is not like Bitcoin because the company is “one entity” that has created these assets. “That is fundamentally different.”
The federal agency even questioned the utility of XRP in the hearing and said:
We dispute whether this utility actually exists, your honor. But the point is: even if it did exist, Ripple and the defendants’ efforts to develop a use for XRP is what makes XRP security.
During Ripple’s, legal counsel Mathew Solomon’s, presentation, Judge Netburn asked if having a utility distinguished XRP from the other two crypto assets:
It might not be relevant to the issue, but it’s important to understand. My understanding of XRP is that not only does it have a currency value but it also has a utility and that utility distinguishes it, I think, from Bitcoin and Ether. Is that correct?
SEC’s legal representative asserted that the SEC needed to know “all of the sales that occurred” (by the executives) and that it was not required to take Ripple’s word for it. At the same time, the agency claimed it developed evidence that Ripple, Garlinghouse, “and another entity” used to sell XRP and “intermingled their XRP sales to one of the market makers.”