Ripple has underscored the importance of federal laws providing clear guidelines on what is prohibited
Following the U.S. Securities and Exchange Commission’s (SEC) misguided enforcement action against blockchain startup Ripple in San Francisco is never boring. Friday brought about yet another development in the case.
In court documents, Ripple contended that the recent Bittner v. United States decision by the U.S. Supreme Court supports their claim of fair notice.
#XRPCommunity #SECGov v. #Ripple #XRP Ripple files Letter Regarding recent Supreme Court case that supports Ripple’s Fair Notice Defense. “This opinion strongly supports Defendants’ fair notice defense. . . . [because] the government’s prior guidance https://t.co/bXwiI3IDVj… https://t.co/9Zv6RKBXoc
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) March 3, 2023
Ripple submitted an additional letter to the U.S. District Court on Friday to support its request in the ongoing legal battle with the SEC. The letter was written in response to a recent decision that limits the U.S. government’s ability to punish American taxpayers who conceal their offshore bank accounts. Therefore, Ripple has emphasized the need for federal laws outlining what is prohibited.
Ripple stated that the Bittner case ruling from the Supreme Court on Tuesday emphasized that the SEC had not given “fair notice” before commencing its enforcement action, which limits the government’s power to exemplary American taxpayers who fail to report foreign bank accounts.
“A fair warning should be given to the world in language that the common world will understand, of what the law intends to do if a certain line is passed,” the Supreme Court ruled in the Bittner case.
At the pre-trial phase of the SEC v. XRP lawsuit, Ripple’s attorneys clarified that the SEC had rejected fair notice for crypto assets in general and XRP. The SEC filed several hurried documents to block Ripple after it declared its intention to present a fair notice defense. However, the court later gave Ripple permission to defend itself using fair notice.
According to this claim, the SEC did not alert Ripple that its acts were illegal before taking legal action. The company argued that the United States’ top financial officer failed to create a clear framework for how securities laws should be applied to the rapidly expanding crypto industry, leading to regulatory confusion in the market.
When determining whether Ripple, along with its current and former CEOs Brad Garlinghouse and Chris Larsen, respectively, broke the law by raising more than $1.3 billion after selling the XRP cryptocurrency as unregistered securities, Ripple has asked presiding judge Analisa Torres to take the Supreme Court’s ruling into consideration.
SEC’s criticism of regulating crypto
The SEC has recently filed new lawsuits against other participants in the market, which has drawn criticism for the agency’s approach to regulating the cryptocurrency space. The entire cryptocurrency industry should admit that the regulator launched a war on the industry with the Ripple case, according to XRP holders’ attorney John Deaton, who is taking the SEC’s strategy. Hence, he urged businesses involved in legal disputes with the SEC to cooperate and “exchange ideas.”
The point is the crypto industry must accept that the SEC waged a war 🆚 crypto when it attacked not only how a promoter sells a token but attacked the token itself – calling software code a security per se – no matter the seller or the circumstances surrounding the sale.
— John E Deaton (@JohnEDeaton1) March 5, 2023
“We must think out of the box and organize. For example, all companies in active litigation with the SEC or about to be should be meeting, sharing ideas, and developing coordinated strategies. It’s a war,” Deaton said.
According to Deaton, this most recent Supreme Court decision strengthens Ripple’s fair notice position if District Judge Torres determines that the business offered XRP as an unregistered security.
The lawyer reaffirmed his conviction that Ripple would prevail in a decision by the current Supreme Court. The most recent Supreme Court decision is the proverbial cherry on top for the company’s case, even if the West Virginia EPA action gives cause to assume Ripple will ultimately prevail in the protracted legal struggle.
Judge Torres’ ruling on the complaint is anticipated to come soon, but it might take up to two months. Yet, the court’s decision will significantly impact which cryptocurrencies should be treated as securities for U.S. federal securities laws if the judge grants the summary judgment.
The cryptocurrency community keenly awaits the case’s summary judgment date, and according to Filan, it may be resolved by the end of March. Yet, several legal professionals, like Deaton, argue that SEC and Ripple might come to an agreement to prevent a further appeal.
“I actually don’t think the SEC will appeal a loss. There’s too much downside for the SEC in front of an appellate court – an adverse ruling from an appellate court would jeopardize the whole ‘no rules, only enforcement’ thing it is doing,” he said.
According to attorney Jeremy Hogan, the SEC may be unable to appeal if Ripple wins the case because of the regulator’s numerous drawbacks. The Hinman speech materials, rumored to provide insight into how the SEC initially assessed the classification of securities, are currently the subject of a renewed legal battle. Since XRP is now in dispute, the case’s conclusion is assumed to affect its value initially.
XRP/USD 4-hour chart | Source: TradingView
At the time of publication, XRP had a weekly loss of over 1% and was trading at $0.3697, failing to overcome the $0.40 resistance. Meanwhile, according to Finbold, if Ripple prevails in the SEC case, a group of financial analysts predicts that XRP will most likely be worth $3.81 by the end of 2025. But, if the SEC wins, the expert expects XRP to trade at $0.98 by 2025. The market capitalization of the coin is $18.99 billion.
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