Key Takeaways
- Ripple hasrequested permission to file a sur-reply to the letter submitted to the court by the SEC
- The Securities Exchange Commission has allegedly made two false claims against ripples
- Ripple’s defence team, two former SEC employees, are going after their former employees
YEREVAN (CoinChapter.com) — In a major blunder, the United States Securities Exchange Commission (SEC) allegedly made false statements in their latest court filing against Ripple.
The high-profile case has been the center of attention since December. Before the close of 2020, SEC went after the then third-largest cryptocurrency, the XRP.
The XRP is the in-house token of the Ripple network.
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Ripple requests permission to file a sur-reply to the SEC’s letter
Having filed a response to the SEC earlier, Ripple’s legal team has now approached the court requesting permission to file a sur-reply to SEC’s letter. In a written plea to Sarah Netburn, the lawyers argued that the SEC has “completely mischaracterized” two pieces of information.
A Sur-reply is an additional reply to a motion that a party files in court after fully briefing the motion in a previous instance.
Former federal prosecutor James K. Filan shared the news of the letter on Twitter.
The first instance of alleged mischaracterization includes the responsiveness rate of undiscovered Slack data. According to Ripple, the SEC’s reply in this regard is “off my many multiples.” Thus, the defense team argues that the SEC claim that Ripple’s Slack notification emails were 10-15 percent more responsive than the rate of Ripple’s submitted emails is false.
“From that collection of 21,000 Slack notification emails, Ripple produced a mere 111 Slack notifications, which amounts to a responsiveness rate of just 0.5% – far lower than the overall Slack communications’ responsiveness rate, and certainly not ten or fifteen times larger, as the SEC falsely claims,“
Ripple’s counsel wrote in the sur-reply.
The second instance is regarding a Slack message sent by Bradley Garlinghouse. Ripple’s lawyer blackened out the news but argued that the message does not prove that Garlinghouse made any illegal sales within the territory of SEC’s influence.
“The SEC does not – and cannot – articulate how this Slack message has any relevance as to whether any Defendant’s sales occurred in the U.S., which is a necessary element of the SEC’s Section 5 claims,”
the lawyers argued.
Recommended: Ripple files Motion to Seal Slack communication exhibits.
Former SEC vs Current SEC
The profile of the legal team involved has caught the attention of the observers.
Representing Ripples in the case against their erstwhile Employers are former SEC chair Mary Jo White and former director of the SEC’s Division of Enforcement Andrew Ceresney.
The former top SEO officials currently work at Debevoise & Plimpton and have agreed to defend Ripple against a securities fraud lawsuit.
Having been insiders at the SEC, the legal team know exactly who they are up against and can use their experience to their advantage. Their gig at the regulatory agency is one of the reasons watchers tie high hopes with them winning the case.
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SEC vs Ripple: The case that Could spell disaster to one of the sides
With the case remaining at the center of the industry’s attention, the outcome can spell disaster for the losing side.
While the SEC will lose its reputation and its decisions will stand questioned, Ripple will have to deal with even a bigger blow should it lose the case.
Not only will the company lose its token, XRP, any chance it has to regain its lost foothold will disappear.
However, rather than quietly settle, which most companies would have done, Ripple has gone public to challenge the US regulator.
In the view of many, the company is fighting for the entire industry and not just for itself.
The outcome, many expect, will shape the future of the crypto industry. It will also answer if the argument that XRP qualifies as stock holds merit. Unlike Bitcoin and Ethereum, XRP’s 100 billion units were pre-mined by the company.
To date, Ripple’s team has been brilliant in their questioning of SEC officials. They have successfully gotten the officials to admit that the regulator had not given them advanced notice clarifying beyond doubt that XRP is, in their view, a stock.
Since this is not the first time the regulator has been inconsistent in their argument, it raised questions if it is deliberately stalling the case.
While it can indicate incompetence on the part of the SEC, at this stage, it looks more like deliberate obfuscation.
Having challenged the Securities Exchange Commission, Ripple has wagered everything and could lose its coin, the XRP.
However, should Ripple win this case, it will take the price of XRP over the moon.
