December 28, 2020
Japan's SBI Group, a key partner of Ripple Labs, has reiterated its unwavering support for Ripple following the SEC's lawsuit alleging XRP is a security. In an official statement, SBI Chairman Yoshitaka Kitao confirmed XRP's status in Japan as a cryptocurrency asset regulated under the Payment Services Act (Funds Settlement Law), exempt from securities laws.
XRP's Regulatory Status in Japan
SBI cited a report by Nomura Research Institute (NRI) clarifying that:
- XRP is widely traded across Japanese exchanges.
- It is classified as a crypto asset, not a security under the Financial Instruments and Exchange Act (FIEA).
- No registration with Japan’s Financial Services Agency (FSA) is required for XRP offerings or sales.
Thus, the SEC’s lawsuit against Ripple does not impact XRP’s compliance in Japan.
NRI’s analysis suggests the SEC’s case may reflect legacy policies from the previous U.S. administration, with potential shifts under the Biden administration. Meanwhile, Bitstamp (the world’s 7th-largest exchange) will restrict U.S. users from trading XRP in January 2021, while international users retain access.
SBI’s Financial Exposure to XRP
SBI emphasized:
- The group holds no direct investments in XRP—only equity in Ripple Labs.
- Subsidiaries like SBI VC Trade maintain XRP inventories solely for client trading.
- XRP’s price decline has negligible impact on SBI’s operations.
However, SBI’s stock dropped 8%+ post-lawsuit announcement.
Counterarguments: SEC’s Persistence
👉 Why the SEC won’t back down
Jake Chervinsky, Legal Counsel at Compound, argues:
- Even with SEC Chair Jay Clayton’s departure, the lawsuit will proceed.
- Enforcement actions are voted on by multiple SEC commissioners—not solely the Chair.
- The legal team leading the Ripple case remains intact and committed.
FAQ
Q: Does XRP’s classification as a crypto asset in Japan affect its global status?
A: No. Regulatory definitions vary by jurisdiction. Japan’s stance doesn’t override the SEC’s claims.
Q: Will other exchanges delist XRP?
A: Likely for U.S.-facing platforms (e.g., Bitstamp), but global exchanges may continue supporting XRP.
Q: How does SBI benefit from supporting Ripple?
A: As a strategic partner, SBI leverages Ripple’s payment solutions for cross-border transactions.
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