A cryptocurrency exchange previously asked the US Securities and Exchange Commission (SEC) “can we trade XRP?” and according to the exchange, they absolutely have the right to trade XRP…but now why does the SEC consider XRP a security? – according to new information emerging from Ripple’s ongoing lawsuit.

Ripple's attorney, Jeremy Hogan, participated in Ripple's pre-trial hearing with the SEC on Tuesday.

Hogan said that Ripple found out some new information about the SEC before the trial. He called the revelation a potential bomb.

“Most recently in 2019. A representative of a cryptocurrency exchange in the US asked the SEC, “Can we trade XRP? Or is XRP a security so we can't trade it? Please let us know.”

According to a representative of this exchange, “the SEC did not tell us at the time that XRP is a security”, nor did they say “No, it is a security, you cannot buy it”.

“And since the SEC didn't say XRP is a security, we decided to support trading for XRP…but why is the SEC claiming XRP is a security now?”

Hogan asks the question

"It's a big deal for the SEC and I don't know how they're going to deal with it, because what changed between 2019 and December 2020 when the lawsuit was filed?"

“Why did the SEC not consider XRP a security in 2019 but why does the SEC say it is a security until the end of 2020?”

“Has the passage of time made XRP a security?”

If anything, XRP will become more like a currency and it is clearly not a security.

Ripple's general counsel, Stuart Alderoty, said that if the SEC says XRP is a security, they must have clear evidence. Previously, exchanges in the US have all concluded that XRP trading is allowed, not prohibited and then the SEC itself did not say XRP is a security but while now.

Hogan revealed that the lawsuit is still ongoing and will take a long time to fight.

The SEC filed a lawsuit against Ripple at the end of December 2020, the SEC declared XRP a security and accused the company and its executives of selling XRP without notice, which greatly affected investors.