On the third of July, 2024, Defense Attorney James K. Filan (@FilanLaw) tweeted that the U.S. Securities and Exchange Commission (SEC) has filed its response to Ripple Labs’ Notice of Supplemental Authority.
This development comes amidst the ongoing lawsuit between the SEC and Ripple regarding the classification of XRP as a security.
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Ripple’s Notice of Supplemental Authority
In a recent development, Ripple filed a Notice of Supplemental Authority citing a favorable decision in a separate case involving Binance. The Binance case pertained to the listing of nine digital assets, which the SEC argued were unregistered securities. The court, however, ruled against the SEC, highlighting the lack of clear regulatory guidance from the commission.
Ripple’s Notice of Supplemental Authority leverages the Binance decision to argue that the SEC’s approach to regulating cryptocurrencies lacks clarity and consistency.
They contend that the SEC’s reliance on enforcement actions through court cases, rather than formal rulemaking, creates uncertainty for market participants. Additionally, Ripple argues that the Howey Test, designed for traditional investments, is not well-suited for classifying digital assets.
SEC Rejects Relevance of Binance Case
The SEC is firmly against Ripple’s attempt to introduce the Binance case into the ongoing legal battle. They argue that the Binance ruling is irrelevant to the current dispute concerning remedies. Furthermore, the SEC accuses Ripple of misconstruing the court’s decision in the Binance case.
The SEC clarifies that the judge in the Binance case did not cast doubt on the agency’s authority. Instead, the judge acknowledged the SEC’s longstanding legal right to enforce federal securities laws, which have been in place for decades.
The SEC emphasizes that their position regarding XRP was further bolstered by the court’s recognition of the 2017 DAO report, which predates the majority of Ripple’s XRP sales. This report served as a public notice to the crypto industry about the SEC’s view on digital assets.
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The SEC goes a step further, pointing out that Ripple received legal advice from its counsel regarding potential legal repercussions from XRP sales. According to the SEC, this demonstrates that Ripple was aware of the regulatory issues surrounding their XRP sales.
In light of these arguments, the SEC maintains that the Binance case holds no bearing on the current dispute and that Ripple was adequately informed about the legal risks associated with their XRP sales.
Importance for the XRP Community
The XRP community is closely following the developments in the lawsuit as it has the potential to significantly impact the future of XRP. A ruling in favor of Ripple could provide much-needed regulatory clarity for the cryptocurrency industry as a whole. Conversely, a decision in favor of the SEC could lead to stricter regulations for digital assets.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Times Tabloid is not responsible for any financial losses.
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