The continuing dispute between Ripple Labs and the United States Securities and Exchange Commission, or SEC, continues, with the SEC alleging that XRP token holders are making misleading assertions on social media sites and targeting its members.
The SEC has made an appeal for a hearing with Sarah Netburn, the Judge in the Southern District of New York to discuss repealing Ripple’s demand to subpoena William Hinman, the former director of the regulatory body’s division of corporation finance. The SEC claimed that granting Ripple’s motion would set a precedent for the business to be granted “a parade of demands for the testimony of high-ranking government officials” and would interfere with US government operations.
“Allowing Defendants [Ripple] to depose Director Hinman would almost certainly result in Director Hinman being served with many deposition subpoenas by the many other persons claimed to have violated the securities laws’ registration obligations during his employment at the SEC,” the motion stated. “As a result, not only would Director Hinman face tremendous difficulties, but other capable individuals would be hesitant to serve in high-ranking positions at the SEC for fear of being embroiled in litigation for years after their terms of service.”
However, among the SEC’s justifications against allowing Ripple to displace Hinman is that proponents of the XRP token, commonly known as the Army of XRP, are reportedly utilizing the social media “as a tool to distribute derogatory and misleading allegations against the leadership of SEC,” including the previous director of the commission. The commission said that the deposition, combined with the publicity it received on social media, could prevent people from applying for government jobs.
The SEC sued Ripple in December, alleging that the company, its CEO Brad Garlinghouse, and co-founder Chris Larsen were selling XRP tokens in an “unregistered, ongoing digital asset securities offering.” Following the announcement by the commission, several crypto exchanges have either suspended or delisted XRP trading. In March, Garlinghouse said that Ripple has agreed to “wind down” its cooperation with MoneyGram, a global money transfer business.
In response to the SEC complaint, Ripple claims that XRP is more like Bitcoin (BTC) or Ether (ETH), which are both categorized as commodities rather than securities by the regulatory body. Members of the XRP Army appear to have centered much of their online activities around the SEC dispute with Ripple, naming Hinman particularly.
Some of the ideas propagated by holders of XRP token on social media about the leadership of the SEC include claims that some members are being used to make China’s economy bigger and greater than the US’s, calls for Jay Clayton, the previous chairperson and Hinman to be investigated.
Members of the XRP Army have also launched an online campaign to convince exchanges to relist the currency in the wake of the SEC lawsuit. The price of XRP hit a yearly high of $1.78 in April and remained above $1.00 for a month. The price of XRP is $0.63 at the time of writing, down more than 35% in the last 30 days.