Ripple has once again run into problems with the US Securities and Exchange Commission (SEC) after announcing its long-awaited stablecoin. The stablecoin, which is expected to be pegged to the US dollar, is expected to give established stablecoins such as Tether’s USDT and USDC Circle a run for their money. However, the SEC is not joyful with this launch and is pursuing Ripple even before its launch.

The SEC says the up-to-date stablecoin qualifies as a securities offering

In April 2024, Ripple announced that it was launching its own stablecoin that would be pegged to the US dollar. The launch of the stablecoin was part of the company’s continued expansion across the globe as it continues to spread its wings in the payments sector.

CEO Brad Garlinghouse revealed that the reason for the company’s launch was to assist combat stablecoin delinking events over the years that have cost crypto investors billions. While this sounds like a noble endeavor, the US SEC is not thrilled.

The stablecoin that Ripple plans to launch qualifies as an unregistered crypto asset, according to the regulator. This was revealed in a redacted document filed by the SEC as part of an ongoing legal battle with the crypto company.

The regulator’s latest allegations relate to its claims that XRP, launched in 2012, qualifies as an unregistered securities offering. The SEC says Ripple has built its business on offering unregistered securities to investors, and its latest stablecoin project also falls into this area.

“Ripple’s core business, as it has been since 2013, is still the unregistered sale of XRP. It also plans to issue a new unregistered crypto asset,” the filing reads. Given this, it appears that the regulator is trying to stop Ripple from launching, which is expected to occur in behind schedule 2024.

Ripple State Lawsuit

Although Ripple won a number of partial victories against the SEC in the past year, such as Judge Analisa Torres’s ruling that programmatic secondary sales did not qualify as a securities offering, its battle with the regulator is far from over.

An agreement between the two sides is expected, but even that is proving to be a challenge. The SEC is requesting that the crypto company be fined $2 billion as an appropriate amount for the “violations.” However, Ripple reacted sharply by offering only $10 million, which the regulator called a “slap on the wrist.”

Both parties are currently at the remedial stage and are submitting their submissions along with supporting documents. Taking this into account, Ripple CLO Stuart Alderoty believes that the almost 4-year battle is coming to an end. “The good news is that we are closer than ever to ending this lawsuit,” Alderoty he stated in post X (formerly on Twitter).

XRP price struggles amid Ripple's battles | Source: XRPUSDT on Tradingview.com

Featured image from Thecryptoalert, chart from Tradingview.com