News that a subsidiary of the fintech Figure has received Securities and Exchange Commission (SEC) approval to run an alternative trading system for digital securities must hit Ripple hard.

Figure built the Provenance platform on which the securities will be custodied, and nearly $3 billion in loans have been traded on Provenance, American Banker reported this week.

"The challenge we had as we were building out our marketplace and our exchange is that we weren't able to offer securities," Figure founder Mike Cagney told the publication. "Having securities trade on a marketplace or an exchange involves a lot more regulatory oversight than having loans trade on the same type of exchange."

The company worked with the SEC and the Financial Industry Regulatory Authority for more than a year to get to this point, but Cagney might make it sound effortless.

"It's something that strategically we knew we wanted to build. It just took a while to work with the regulators to make sure they understood how blockchain works," Cagney, who also founded SoFi, told American Banker. "It opens up the whole universe of security tokens for us."

Ripple is forging its own relationship with the SEC, albeit fraught with a considerable legal roadblock. The regulator sued the blockchain payments company in December, claiming CEO Brad Garlinghouse and co-founder Chris Larsen violated investor-protection laws by selling nearly $1.4 billion in unlicensed securities — namely, the XRP cryptocurrency the company created.

Ripple has argued XRP is not a security, but a currency. In a March court filing, Ripple accused the regulator of "picking virtual currency winners and losers," noting that Bitcoin and Ether are exempted from SEC oversight.

XRP lost 60% of its value in the week after the SEC filed its December suit, Bloomberg reported. Coinbase suspended trading of it the following month.

Given the SEC's working relationship with Figure, perhaps the regulator is simply more permission-based than forgiveness-based, and begs curiosity as to what Ripple's relationship with the SEC would have looked like if the company had proactively reached out to the regulator.

Ripple and the SEC still might not have been chummy. The regulator, in its suit, claims Garlinghouse and Larsen "created an information vacuum" that allowed them to sell XRP into a market that only had information they chose to share.

But perhaps it's not as black and white as winners and losers. Figure's transparency with the SEC may have given that company a win.

With that said, this week has also made a case or two for the "winners and losers" argument. A federal district court judge on Wednesday denied Citi's request to continue to freeze $504 million the bank mistakenly paid — with its own money — to creditors on a Revlon loan for which it was an administrative agent.

The judge ruled in February that the asset managers do not need to return the money, citing the "discharge-for-value" principle, a precedent from a 1991 ruling allowing creditors to keep a payment from a third party if the creditor didn't realize it was sent in error and didn't make any misrepresentations.

The defendants "are entitled to use the money without interference" from Citi, Judge Jesse Furman ruled Wednesday. Furman had frozen the funds in August while considering the case.

The ruling doesn't necessarily free the money yet. It's still on hold pending a request Citi has seven days to file with the Second Circuit Court of Appeals, which could issue a separate freeze order while the February decision is challenged.

Furman said Wednesday Citi "faces an uphill battle on appeal." And perhaps the logic is: This is the ruling, and if the money is still tied up by courts, the ruling has no teeth and Citi feels no consequence. Sure, Citi lost in February, but lifting the freeze amplifies Citi's status as — to apply Ripple's language — the loser. (Other Revlon creditors chose to return the remainder of the errant payment, which was roughly $900 million.)

Meanwhile, a disruptor that has long suffered in the court of public opinion — the Facebook-backed Diem Association — further backed off its plan for a global scale this week, withdrawing its application for a payments system license with the Swiss regulator FINMA in favor of a strategy to register with the Financial Crimes Enforcement Network as a money services business, partner with an existing bank and peg its coin to the U.S. dollar rather than a basket of currencies.

When it launched its vision in 2019, Diem — then Libra — faced near-immediate pushback from lawmakers concerned that it would be a target for money laundering and terrorist financing. The Swiss government expressed its doubt in the project in December of that year. "Central banks will not accept the basket of currencies underpinning it," Ueli Maurer, then Switzerland's finance minister, said, according to Reuters. "The project, in this form, has thus failed."

The association changed it name, shifted to its FINMA application, and this week, let that go — perhaps seeing that that, too, was an uphill battle.

Here, though, the Figure and Ripple philosophies collide. Where Ripple might characterize Diem's journey as one where it's been picked as a loser by the Swiss, Diem may just now be trying the sort of transparency in the U.S. that gave Figure its win.