SEC requests permission to file sur-sur-reply to Ripple fair notice defense

Key Takeaways:

• The SEC has sought the court’s permission to file a sur-sur-reply to Ripple’s sur-reply regarding the fair notice defense.
• Bulls defended XRP’s immediate support.

NEW DELHI (CoinChapter.com) — On Tuesday, the Security and Exchange Commission (SEC) filed a request for the court to accept its reply to Ripple’s sur-reply regarding its Motion to Strike the defendant’s “fair notice” defense.

The U.S. securities regulator had moved to strike Ripple’s fair notice defense, citing a case dubbed SEC v/s Fife. In response, Ripple’s attorneys argued that the market watchdog has been misapplying the recent ruling in its case against the blockchain payment platform.

The defendants further said that Ripple’s defense is “a completely different procedural posture” from Fife’s, in which a federal court sided with the SEC and dismissed a penny stock investor’s fair notice defense.

#XRPCommunity #SECGov v. #Ripple #XRP SEC files request to file Sur-Sur-Reply regarding Motion to Strike, citing SEC v. LBRY decision in which New Hampshire federal judge granted judgment on the pleadings on an unrelated selective enforcement defense.https://t.co/zbEXz7K53Y

— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) February 22, 2022

On Feb. 22, the SEC sent a letter to Judge Analisa Torres, requesting the court exercise its discretion to consider its sur-sur-reply. The regulatory body believes its reply would help refute Ripple’s arguments.

SEC’s Arguments

SEC’s reply also included responses to certain arguments Ripple made. It cited a recent case, dubbed “SEC v. LBRY,” that it claimed was similar to Ripple.

The court had ruled in SEC’s favor, striking LBRY’s affirmative defense. Furthermore, the presiding judge concluded that LBRY failed to validate its request to disregard other enforcement actions by the SEC.

The SEC highlighted that “Ripple claims that those enforcement actions cannot establish, at the pleadings stage, that Ripple had sufficient fair notice.“

However, the market regulator argues that the LBRY case’s verdict supports the SEC’s position to strike the fair notice defense. SEC’s letter states that similar to LBRY, Ripple cannot dispute “the SEC publicly filed the digital asset enforcement action.”

Related: Additional SEC vs. Ripple documents unsealed – fair notice defense under fire?

The defendants had argued that SEC’s past enforcement actions were insufficient to provide a fair notice that its offer and sales of XRP could be illegal. However, the SEC also alleged that Ripple’s argument is based on an incorrect interpretation of the fair notice defense.

In detail, the SEC claimed that Ripple’s arguments seem to indicate that since none of SEC’s past digital asset cases had identical features and circumstances, the defendants lacked fair notice. But, the SEC noted, a fair notice does not need “such exact factual correspondence.”

Moreover, the SEC stated that Ripple’s contention that SEC’s earlier digital asset cases involving illegal sales were limited to the ICO context is incorrect, citing examples of cases like SEC v. Telegram Grp.

As such, the market watchdog argues the judgment helps refute Ripple’s contention that the SEC’s enforcement history does not justify striking the defendant’s fair notice defense.

XRP Price Charts

Ripple’s recent positive strides in its legal battle with the SEC have not had much effect on XRP’s price action. XRP prices fell 9.54% on Feb. 21 but have recovered since Tuesday.

Moreover, the long lower wicks on XRP’s green candles since Feb. 22 show that bulls are aggressively active at lower price levels. In addition, the wicks also indicate the high demand for the XRP token.

XRP rebounded from the $0.67 support level on Feb. 22. Although the token fell on Wednesday, XRP recovered later as trading continued. At present, XRP has immediate resistance from its 50-day moving average (violet wave) near the $0.739 price level.

XRP would then need to flip its 26-day exponential M.A. line (white wave) to challenge resistance at $0.78. Finally, a sustained uptrend would bring XRP near resistance from its 100-day M.A. line (yellow wave) at $0.822.

Also Read: Judge Netburn to take the biggest decision in the Ripple vs. SEC case.

The relative strength index for XRP is currently neutral, clocking 46.37 on the daily charts.

If the uptrend fails, XRP has support near the $0.681 price level, which survived the token’s testing during the Feb. 21 crash. Moreover, a sustained downtrend would bring the support at $0.64 into play. Finally, the $0.6 price level, which supported XRP between Jan. 22 and Feb. 4, is key support.

Meanwhile, trend-based momentum oscillator MACD charted a bearish crossover for XRP on Feb. 21. A bearish crossover occurs when the MACD line (difference between 12-day and 26-day EMA) moves below the MACD signal line (9-day EMA of MACD).

Moreover, bars on the MACD histogram are expanding, indicating increasing bearishness of XRP’s price momentum.