A statement issued Monday by Japan-based financial services firm SBI Holdings said XRP is a “cryptocurrency asset.” under Japanese law.
The declaration comes after the U.S. Last week, the Securities and Exchange Commission sued Ripple Labs stating that it made a profit of $1.3 billion selling XRP to retail investors despite not listing the cryptocurrency as a security in the U.S.
SBI cited a research paper by Sadakazu Osaki of the Nomura Research Institute that XRP is a “cryptocurrency asset” under Japanese law and is not a security in Japan.
In October, CoinDesk announced that Ripple was preparing to invest in SBI’s MoneyTap blockchain-based payment subsidiary, which was planning to use RippleNet to reduce Japanese transfer costs.
Several blockchain firms around the world are backing away from XRP, including Bitwise in the United States, Bitstamp in Europe and the OSL exchange network in Hong Kong.
“SBI is putting lipstick on a pig to try and minimize the damage to its reputation in Japan from the Ripple lawsuit,” said Joel Edgerton, chief operating officer of BitFlyer USA, a cryptocurrency exchange with a large presence in Japan as well. “SBI is an aggressive player in the Japanese financial industry and it is working to buy the pieces required to make it a leader in Japanese crypto,” Edgerton said. “However, it has many other regulated businesses that will not want any negative reputation impact.”