XRP LAWSUIT: SEC Tries To Kill Ripple’s Fair NoticeJanuary 10, 2022 4:38 pm
On December 22, 2020, the Securities and Exchange Commission filed a lawsuit against Ripple Labs and two of its executives. The complaint alleges they traded $1.3 billion in their cryptocurrency XRP as a security without first registering it with the SEC.
In response, Ripple says that the SEC is not being equal in their assessment of what is a security.
The SEC claims XRP is a security because it is used to finance Ripple’s platform. Ripple, however, is alleging the “free-pass theory” which alleges the SEC is targeting some companies while giving a “free pass” to others, such as Etherium for the same practices.
The latest developments are in today’s latest filings revolve around fair notice practices.
#XRPCommunity #SECGov v. #Ripple #XRP Ripple has filed its response to the SEC's Notice of Supplemental Authority regarding the SEC's Motion to Strike the Fair Notice Defense. pic.twitter.com/1QJywlLhcd
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) January 10, 2022
Last year, a Northern District of Illinois court denied the defendants’ motion to dismiss claiming there was no fair notice for the term “dealer”.
Attorney Hogan says this case is not the same as the burden is on the SEC.
The SEC filed a letter of supplemental authority to support their motion to strike the Ripple 4th affirmation defense, commonly known as the fair notice argument.
In the letter, the Fife defendants say they did not have fair notice of the SEC’s novel interpretation of the statutory term “dealer”.
The SEC is making the following argument, according to Financefeeds.com:
“It is for the courts – not the parties – to determine whether particular conduct falls within the scope of the statute.”
“Indeed, the court rejected the defendants’ fair notice defense at the motion to dismiss stage despite acknowledging that lack of “binding authority” constructing the term “dealer”. In Ripple’s case, binding authority constructing the term “investment contract” has existed since 1946.”
Ripple has faced some challenges this past month due to the SEC accusations. However, after an initial sharp drop, XRP is regaining some traction with the more recent news that Ripple is fighting the accusations.
Hogan took to Twitter to respond:
“It was in a very different stage of litigation and the standard is completely different than the SEC v. Ripple case”, Hogan stated on Twitter.
He continued, “In the “Fife” case, the Defendant tried to argue “Fair Notice” in order to dismiss the lawsuit entirely (and failed) because the burden is very high on a party moving to strike a pleading. Fife can still raise it as an affirmative defense later – and I expect they will.
“In the Ripple case, it’s the SEC that is trying to strike the affirmative defense of Fair Notice and it has the high burden to meet. The general idea in modern courts is that the decision should be made after looking at the evidence, unless there’s no “plausible” way of winning”
As of this writing, XRP is holding at above .70 from its brief peak of above $1.00 on December 23rd.
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