Blockchain firm Ripple plans to fight approaching U.S. SEC lawsuit

HONG KONG (Reuters) - Ripple, the blockchain payments company associated with the cryptocurrency XRP, said on Tuesday it would oppose a lawsuit against it by the U.S. Securities and Exchange Commission.

FILE PHOTO: The logo of blockchain company Ripple is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren/File Photo

XRP, the third-biggest cryptocurrency by market value, was created and sold initially by San Francisco-based Ripple.

Globally, financial regulators are still assessing how they should regulate the cryptocurrency industry and digital tokens like Bitcoin and its rivals. These rules could determine whether cryptocurrencies make the leap from a niche to a mainstream asset.

“We are right and will aggressively fight - and win - this battle in the courts to get clear rules of the road for the entire industry in the U.S.,” Ripple Chief Executive Officer Brad Garlinghouse said in an emailed statement.

“Instead of providing a clear regulatory framework for crypto in the U.S., Jay Clayton inexplicably decided to sue Ripple – leaving the actual legal work to the next Administration,” the statement said.

The SEC could not be immediately reached for a comment.

The statement did not specify the nature of the suit against Ripple, but a company representative said the S.E.C. had informed Ripple it planned to file the suit this week.

The Wall Street Journal and Fortune magazine, which reported the news earlier and quoted from an interview with Garlinghouse, said the S.E.C. would claim Ripple violated investor-protection laws when it sold XRP.

“The SEC is fundamentally wrong as a matter of law and fact. XRP is a currency, and does not have to be registered as an investment contract,” the company said.

XRP dropped 5.36% against the dollar in Asian hours on Tuesday.

Reporting by Alun John; Editing by Rashmi Aich