Two firms that use Ripple’s XRP in their business have come out in support of the company on trial. One day after the court ruled that the SEC has to hand the Hinman documents over to Ripple labs, two firms filed their applications in support of Ripple. On September 30, I-Remit Inc. and TapJets announced their support for the beleaguered company.
The first firm to issue a brief in support of Ripple on September 30 was I-Remit. I-Remit is a Philippines-based global payment company and an important partner of Ripple. The document is mostly harsh in its tone as it insists on why XRP is not a security and that the whole case is a major attempt to misinterpret and misrepresent how digital assets operate.
In that lawsuit, the Securities and Exchange Commission has taken the position that Ripple’s distribution of XRP should be considered the trading of an “unregistered security” and that XRP token distribution works as an ‘investment contract’ within the meaning of the Securities Act of 1933 – therefore subjecting XRP to federal securities regulation.
That position badly misunderstands how XRP is used. The SEC appears to misconstrue important aspects of the big and growing international crypto sector, seeking to expand its regulations over markets without any relationship to its traditional scope of authority.
Many hours later on the same day, it was noted that TapJets, another one of Ripple’s partners filed its amicus curiae. The private jet charter firm aimed to highlight the utility of XRP tokens. this filing calls the token crucial to its operations as it enables clients to book flights outside the working hours of banks and free of restrictions of wire transfers.
In this case, TapJets interest is a business that accepts crypto, including XRP, in exchange for its services as a fiat-currency substitute. For TapJets, the acceptance of XRP as a method of payment for services is crucial in some incidents: TapJets refers to this as the “Friday Night Problem”.
In that context, the Friday Night Problem expounded in detail in the (Proposed) Motion below, happens when a traveler wishes to book immediate travel but cannot tender payment using traditional currency, normally because the booking happens outside of the normal banking hours.
When the banks are closed, money transfers through wires cannot be sent. Hence, the costs of private jet charters can reach hundreds of thousands of dollars per single flight, and given the transactional limitations and risks associated with accepting credit card payments, money transfers through wires are a major payment option for Travelers using TapJets’ services.
Since the nature of TapJets’ business needs instantaneous payments, Travelers who can just rely on money transfers through wires cannot avail themselves of TapJets’ services. Due to the inherent nature of cryptos circumvents the Friday Night Problem, TapJets accepts cryptocurrencies.
The latest filings were not the first amicus curiae briefs during the Ripple trial. On September 22, a crypto lobby group submitted its contribution to the matter. XRP token experienced a steep surge in Value after the court’s decision was made public. It spiked from $0.436 to $0.48 between Thursday and Friday evening.
Buy Crypto NowWhy Is The Ripple Case Important?
The Ripple Labs trial is maybe the earliest high-profile case of the SEC arguing that cryptos are Securities – which is something Ripple has been denying since the beginning. While the commission has since brought similar actions against many other firms, this case is the only massive one that went on trial.
In this context, the outcome of the trial could set a major legal precedent for the treatment of digital currencies. It means that whether Ripple wins or loses can determine the faith of many crypto companies – both smaller and bigger ones like Coinbase.
This week’s developments come at a specifically critical time since legislators are entering high gear in matters of crypto regulation. Not only are the CFTC and SEC aiming to gain more authority over the industry, but the White House has finally issued its first framework for cryptocurrency regulation.
Digital assets firms are also beginning to actively work on passing crypto-friendly laws. The Blockchain Association, an alliance of many major operators in the digital assets industry, recently set up a PAC hoping to help elect crypto-friendly candidates in the forthcoming elections.
