The United States’ Securities and Exchange Commission’s lawsuit against Ripple is once again heating up the courtroom, even in the middle of winter. After several tussles between the American regulator and the blockchain company over extension requests, the SEC has filed a Letter of Supplemental Authority. This adds to its motion to strike at a major pillar in the case – Ripple’s Fair Notice Defense.
Life’s not always “fair”
The SEC filing shared by former federal prosecutor James K. Filan cited the SEC v. Keener case. Here, the court ruled that the defendant did not identify themselves as a securities “dealer,” and that Keener’s Fair Notice Defense did not hold. The filing stated,
“In rejecting the “fair notice” defense “as a matter of law” and awarding the SEC summary judgment, Keener held that the “Defendant had notice that his conduct could be unlawful based upon ‘the express language of the Exchange Act, decisions from this circuit applying the definition of “dealer,” and [SEC guidance] itself.’” “
In everyday English, the court ruled that the Exchange Act’s language should have been enough fair notice for Keener to know they had to register themselves as a securities dealer. Now, the SEC wants to apply a similar standard to Ripple’s Fair Notice Defense.
Rippling with indignation
Ripple has responded to the SEC’s letter in its own filing submitted to the court. In short, the San Francisco-based blockchain company argued that the procedure in the Keener case could not apply to its own defense, as the court hadn’t yet considered Ripple’s “factual record.”
Furthermore, Ripple stressed on the need to wait for the discovery stage of the case. It noted,
“The SEC has not identified any controlling authority granting a motion to strike a defense comparable to the one Ripple has asserted here. Without such controlling authority, the SEC’s motion must fail under the Second Circuit’s standards for motions to strike.”
The SEC previously cited the case of SEC v. Fife, to bolster its motion to strike Ripple’s Fair Notice Defense.
Can XRP take the suspense?
While the case drags on and both the SEC and Ripple submit their filings, it’s vital to remember that tens of thousands of XRP holders have come together to make sure that Congress hears their concerns.
17K messages have been sent to Congress from US Holders asking for an investigation. 13K International Holders have joined the Petition asking for the same. We won’t stop until there’s an investigation. pic.twitter.com/0pmW7LE79Z
— John E Deaton (@JohnEDeaton1) January 27, 2022
What’s more, issues such as frozen XRP in retirement accounts and XRP de-listed from major exchanges have impacted many investors. Some also believe that the court case has hurt the asset’s price performance.
At press time, XRP was trading hands at $0.6073 and rallying slightly after a drop of 11.84% in the past seven days.