Ripple Intensifies Defense With Recent Submission In SEC Case

Ripple Labs has filed a notice of supplemental authority to bolster its stance within the enduring legal face-off with the Securities and Exchange Commission (SEC). This filing was made to america District Court for the Southern District of Recent York in response to the SEC’s motion looking for remedies and final judgment.

Ripple Uses Binance Ruling

The core of the defense leverages a recent ruling from the US District Court for the District of Columbia within the case of SEC v. Binance Holdings, Ltd., No. 1:23-cv-01599-ABJ-ZMF. The Binance decision, issued on June 28, 2024, partially granted and partially denied the SEC’s allegations that Binance engaged in sales of unregistered securities.

The court determined that the SEC didn’t present sufficient evidence to point out that secondary market transactions involving BNB tokens on crypto exchanges qualified as securities transactions. Ripple cites this decision as a pivotal reference, arguing its relevance as a consequence of its analytical parallels with it’s own ongoing litigation.

Of their detailed reference to the Binance ruling, Ripple’s legal team highlights a big remark by the Binance court: “[I]ntangible digital assets don’t fit neatly into the rubric set forth within the mere seven pages that comprise the Howey opinion.” This statement underscores a recurrent theme in digital asset regulation, pointing to the complex nature of applying traditional securities law to modern digital assets.

The court’s criticism of the SEC’s piecemeal litigation approach was also noted within the submission, stating, “Also, the agency’s decision to oversee this billion dollar industry through litigation – case by case, coin by coin, court after court – might be not an efficient technique to proceed, and it risks inconsistent results that will leave the relevant parties and their potential customers without clear guidance.” This reflects a broader criticism inside the cryptocurrency industry regarding the SEC’s regulatory strategy.

Moreover, Ripple argues for judicial clarity regarding the legality of XRP sales, which was emphasized as a critical final result of the court’s previous summary judgment. “This remark supports Ripple’s argument that providing clarity on the legality of the differing types of sales of XRP was probably the most significant aspect of the Court’s summary judgment decision,” the filing stated. Ripple contends that such clarity is important not just for its operations but for the cryptocurrency market at large, stressing that regulatory clarity prior to the court’s ruling supported their position against severe penalties.

The filing also touches on the character of the violations Ripple allegedly committed, arguing that the SEC’s inability to determine recklessness on Ripple’s part should mitigate the severity of any proposed remedies. “The dearth of regulatory clarity prior to that ruling in turn supports Ripple’s position that the Court’s finding of a strict liability violation on a few of Ripple’s sales – but far fewer than the SEC alleged were violations – doesn’t reflect reckless disregard for the law,” the corporate’s lawyers argued.

This supplemental notice was submitted by Michael K. Kellogg of Kellogg, Hansen, Todd, Figel, & Frederick PLLC, and Debevoise & Plimpton LLP, serving as counsel for Ripple Labs Their submission not only seeks to counter the SEC’s latest motions but additionally to affirm the corporate’s broader arguments regarding the applying of securities laws to cryptocurrency transactions—a point of interest of legal, regulatory, and academic debate as digital assets proceed to challenge traditional frameworks.

At press time, XRP traded at $0.47979.

XRP price stays below the 200-day EMA, 1-week chart | Source: XRPUSD on TradingView.com

Featured image created with DALL·E, chart from TradingView.com

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