The United States Securities and Exchange Commission (SEC) has presented an argument to a federal judge, stating that a recent court decision has dealt a blow to a key defence strategy employed by Ripple Labs in its ongoing legal battle with the agency.
In a letter dated April 11, 2023, and addressed to U.S. District Judge Analisa Torres, who is overseeing the ongoing legal case between Ripple Labs and the SEC, the agency highlighted the significance of the judge’s ruling in a separate enforcement action that it had previously won against Commonwealth Equity Services.
#XRPCommunity #SECGov v. #Ripple #XRP SEC files Letter of Supplemental Authority in further Support of its Motion for Summary Judgment. https://t.co/rdzW3Q6SIT
— James K. Filan ???????????????? (@FilanLaw) April 11, 2023
The SEC cited an established legal precedent to argue that Ripple Labs has been provided with adequate “fair notice” of what constitutes a security. The precedent in question is the long-standing Supreme Court ruling that established the Howey test, which is commonly used to assess whether a particular asset can be classified as a security. The SEC pointed out that the same precedent was also cited in the Commonwealth case.
To further discredit Ripple’s defence of “fair notice,” the SEC presented what it referred to as “additional authority,” pointing to its previous case against Commonwealth.
Ripple Labs has made the argument that the SEC did not give it sufficient notice before filing a lawsuit against the company in December 2020, which forms one of its main defences in the ongoing legal dispute. However, some legal experts, including John E. Deaton, hold a differing opinion from the prevailing view held by many that this defence will ultimately be successful.
Deaton believes that Ripple Labs’ best shot at success is to convince the judge that XRP, Ripple’s cryptocurrency, doesn’t meet the definition of a security under the Howey test. He notes that the fair notice defence can only be invoked if the judge concludes that XRP was security at any time from 2013 to the present.
Ripple’s CEO, Brad Garlinghouse, has reportedly criticized the U.S. SEC amid the ongoing legal dispute over the classification of XRP, Ripple’s native coin.
Garlinghouse made his remarks in response to SEC Chairman Gary Gensler’s presentation of the agency’s fiscal year budget to the House Appropriations Committee. Garlinghouse was displeased with how the SEC boss, Gary Gensler, labelled crypto assets as beyond comprehension.
Asides from Ripple Labs, Coinbase is another platform that the SEC has filed a lawsuit against. Just after submitting a petition to the SEC, citing reasons as to why staking should not be considered a security, the regulatory body served the platform a Wells notice. This didn’t sit well with Coinbase’s CEO, Brian Armstrong, who had criticized the regulatory body and likened the body to soccer referees in a game of pickleball.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
