Ripple legal team use SEC Commissioners’ statement to show their regulatory uncertainty, and got a small victory, again
Attorneys representing CEO Brad Garlinghouse and co-founder Chris Larsen, representing the legal team for Ripple, filed a new defense against the U.S. Securities and Exchange Commission (SEC). This filing aims to use recent SEC comments as evidence of regulatory uncertainty.
Ripple legal team use Coinschedule penalty as a defense
As AZCoin News reported, the SEC placed a $200,000 fine on Coinschedule and its parent company Blotics. Later, SEC Commissioners Hester Peirce and Elad Roisman commented on the outcome of the case. At that time, Peirce and Roisman both agreed that the SEC’s ruling was flawed because it failed to specifically explain which projects touted by Coinschedule are actually securities.
SEC Commissioners Hester Peirce and Elad Roisman wrote a letter criticizing the commission for failing to specifically explain which projects touted by Coinschedule are actually securities
“We nevertheless are disappointed that the Commission’s settlement with Coinschedule did not explain which digital assets touted by Coinschedule were securities, an omission which is symptomatic of our reluctance to provide additional guidance about how to determine whether a token is being sold as part of a securities offering or which tokens are securities,” Peirce and Roisman expressed their disappointment.
As such, Ripple has relied on this rationale to highlight the SEC’s lack of regulatory clarity.
“There is a decided lack of clarity for market participants around the application of the securities laws to digital assets and their trading”, the lawyers stated.
If Ripple’s legal team is correct, the SEC violated Section 17(b) of the Securities Act, which requires courts to take judicial notice of facts that are not subject to reasonable dispute and facts from sources that cannot be reasonably questioned.
Lawyer James Filan also stated a full list of relevant comments can be read in Ripple’s most recent court filing.
#XRPCommunity #SECGov v. #Ripple #XRP Individual Defendants file letter and Peirce & Roisman statement as supporting Motions to Dismiss amid “significant regulatory uncertainty regarding when digital assets may be classified as securities by the SEC.”https://t.co/I0tDYjpA6B
— James K. Filan ???? (@FilanLaw) July 19, 2021
And most recently, Filan also updated the decision from the court and Magistrate Judge Sarah Netburn that Ripple can take testimony from Hinman without any obstacles.
#XRPCommunity #SECGov v. #Ripple #XRP UPDATE: “We have reached an understanding, reflecting a compromise by all parties, pursuant to which the Defendants may examine Mr. Hinman on various issues without triggering a privilege objection from the SEC.” pic.twitter.com/BtT8uPZfR5
— James K. Filan ???? (@FilanLaw) July 19, 2021
Garlinghouse and Larsen’s lawyers believe that the statement related to Coinschedule proves that charging the defendants would be legally untenable:
“Plainly, it could not have been “so obvious that the Individual Defendants must have been aware of it years ago that XRP was an investment contract when two of the five SEC Commissioners acknowledge today that the regulatory status of digital assets remains so characterized by a decided lack of clarity that the only certainty we see is that people have questions about how to comply with the applicable laws and regulations.”
The filing seems to apply only to the two Ripple executives. It does not seem to concern Ripple as a company. The case is still ongoing and is predicted to end in early 2022.
Read more:
- Ripple’ Small Victory In The Ongoing Battle With The SEC Is Not Enough To Help XRP Price Increase In The Near Term
- XRP Ledger Foundation Has Set Up A New Office In A European Country, Ripple Will Bring Clarity To Crypto Industry