Washington D.C.-based Blockchain Association has rallied behind Ripple in its legal battle against the Securities and Exchange Commission (SEC). On 29 October, the crypto advocacy and lobbying outfit announced that it has filed an amicus brief focus on the correct interpretation of the Howey Test. Recall that the infamous Howey Test has been used by the SEC to classify several cryptocurrencies as securities.
Broad interpretation of the Howey Test
“The SEC’s broad, haphazard interpretations of the securities laws currently stand as the single greatest threat to the future of this rapidly growing industry. By erratically applying these outdated standards to a modern and innovative technology, the SEC continues its regulation by enforcement pattern, punishing crypto companies with little justification or warning.” said Kristin Smith, Executive Director of Blockchain Association.
The group indicated that Ripple’s decision to go against the SEC could be a positive for the crypto community on the whole. Furthermore, the case could also offer some clarity over the regulatory landscape and put an end to SEC’s ‘regulation through enforcement’.
“No regulatory agency should unilaterally regulate crypto with outdated standards. Instead, it’s time for Congress to define a clear regulatory framework to guide the industry”, as per the group.
1/ Today we announced we filed an amicus brief supporting a correct interpretation of Howey in the SEC’s two-year legal battle against @Ripple.
A judge now has the opportunity to issue a substantive opinion on how Howey applies to digital assets.
Here's what's at stake🧵🧵🧵
— Blockchain Association (@BlockchainAssn) October 28, 2022
The Blockchain Association became the latest entity to file an amicus brief in this case, following similar filings by Investor Choice Advocates Network and SpendTheBits Inc. on 28 October, the Chamber of Digital Commerce, TapJets and I-Remit filed amici curiae in a bid to influence the court’s verdict in this case.
A long-awaited outcome
It has been almost two years since the regulator sued Ripple for failure to register XRP as a security. Stakeholders in the industry are anxious about the verdict, given the critical precedent it will set. Last month, both the parties asked the court to deliver a summary judgment, which basically meant a verdict without the full trial.
On 27 October, Ripple published its third quarter XRP market report. As per the report, Ripple’s XRP holdings were below 50% of the total outstanding supply for the first time. This could work out in favor of Ripple’s decentralized rhetoric for XRP and may also prove useful in the ongoing lawsuit.