Ripple has encountered issues once again with the United States Securities and Exchange Commission (SEC) following the announcement of its eagerly awaited stablecoin. Pegged to the US dollar, this stablecoin aims to challenge established ones like Tether’s USDT and Circle’s USDC. However, the SEC has taken issue with this launch, pursuing Ripple even before the stablecoin's release.

SEC Claims New Stablecoin Is an Unregistered Securities Offering

In April 2024, Ripple announced its plan to launch a stablecoin pegged to the US dollar as part of its global expansion in the payments sector. CEO Brad Garlinghouse stated that the goal was to address stablecoin de-pegging events, which have previously cost crypto investors billions. Despite this intention, the SEC was not pleased.

The SEC argues that Ripple's new stablecoin qualifies as an unregistered crypto asset. This claim was detailed in a redacted brief filed by the SEC in its ongoing legal battle with Ripple. The SEC’s allegations align with its stance that XRP, launched in 2012, is an unregistered security offering. The regulator contends that Ripple's business model revolves around offering unregistered securities, including the new stablecoin.

Ripple’s Ongoing Legal Battle with the SEC

Ripple has achieved several partial victories against the SEC in the past year, such as Judge Analisa Torres ruling that secondary programmatic sales did not constitute a securities offering. However, the legal battle is far from over.

While a settlement is anticipated, it remains contentious. The SEC demands a $2 billion fine for Ripple’s alleged violations, whereas Ripple has countered with a $10 million offer, which the SEC deems insufficient.

Currently, both parties are in the remedies stage, submitting their briefs and supporting documents. Ripple’s Chief Legal Officer, Stuart Alderoty, remains optimistic, stating, “The good news is that we are closer than ever to putting this lawsuit behind us,” in a recent X (formerly Twitter) post.