Ripple has filed a motion seeking dismissal of the suit ahead of the trial in federal court in Manhattan. The blockchain firm argued that the crypto-asset at the center of the ongoing legal battle – XRP – cannot be considered a security. In a recent filing over the weekend, Ripple contended that there was no investment contract that granted investors rights or required the issuer to act in their interests.

Ripple further alleged that the United States Securities and Exchange Commission’s (SEC) unbridled position could deem the sale of all types of ordinary assets, including diamonds, gold, soybeans, cars, and art as sales of securities. Ripple added that the financial regulatory agency was not granted that type of authority by the U.S. Congress.

In the filing, the San Francisco-based firm stated that the Securities and Exchange Commission’s claim was bound to fail and cited the lack of documents granting any post-sale rights to recipients as against Ripple or imposing any post-sale obligations on the firm to act in the benefit or capacity of those recipients.

In December 2020, the SEC sued Ripple Labs, CEO Brad Garlinghouse and Chairman Chris Larsen. The agency alleged that the above-mentioned entities connected to Ripple accrued more than $1.3 billion through the sale of XRP as an unregistered security. The watchdog said that Ripple funded its business by touting XRP’s potential, selling and distributing XRP to investors while keeping a sizeable amount of XRP for itself.

On the other hand, the blockchain firm maintained that the sales of the crypto-asset and trading did not satisfy the Howey Test (a US Supreme Court case for checking if a transaction qualifies as a security). Both parties have filed separate motions calling on the US District Court Southern District of New York to make an immediate ruling on the legal tussle.

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