Yerevan (CoinChapter.com) – The US Securities and Exchange Commission (SEC) claimed that the seventy-plus lawsuits and actions it filed against other cryptos in the past 5 years should have been sufficient for Ripple Labs to expect they were going to be next. However, the blockchain startup asserts the lawsuit against them does not fall into the pattern.
In hindsight, SEC initially filed the lawsuit in December 2020 on the grounds of considering Ripple Lab’s token XRP securities. Thus, when the company sold $1.3 billion worth XRP, the SEC found them in violation of US investment laws and deemed the action “an offering of unregistered securities.”
Fair notice defense against SEC
Ripple Lab’s defense was partially based on the fact that the agency never gave them a ‘fair warning’ before filing the lawsuit. The SEC cited research conducted by Cornerstone, a private investigation firm, which stated all of the 75 actions and lawsuits the agency filed against crypto companies contained allegations of fraud and unregistered securities offerings.
The law enforcement agency presented the research to the court, claiming that those lawsuits and actions directly put Ripple in the line of fire. Thus, making a move to tear down the company’s “fair notice defense” strategy. Attorney Jeremy Hogan took to Twitter to call the SEC’s actions “very misleading.”
The attorney stated that all of the SEC’s past lawsuits involved an ICO (Initial Coin Offering). In those cases, the profits were used to create the ledger. However, Ripple Labs did not hold an ICO, as the XRP ledger existed long before.
Mr. Hogan also retweeted a statement by James K. Filan, a lawyer directly involved in the case. The latter tweeted on the new development and presented the sur-reply — an “additional reply to a motion filed after the motion has already been fully briefed” — that Ripple motioned on June 7.
According to the Sur-reply:
The SEC asks this Court to take “judicial notice” of a private firm’s analysis to smuggle in “more than seventy cases,” the vast majority of which the SEC never cited in its opening brief.noted Ripple.
As the SEC was gradually losing its leverage in the lawsuit, Mr. Hogan believes it will end in a settlement soon enough.
He cited that 96 percent of SEC cases are settled before trial, and 96 percent of those, settle in discovery. The lawyer is convinced that the case against Ripple will provide significant precedent for the crypto community as a whole. It will possibly prevent future lawsuits or at least provide clarifications and necessary definitions.
The attorney stated that the SEC vs. Ripple lawsuit would likely end with Ripple paying the penalty limited to certain dates. Also, he asserted that when court proceedings are over, exchanges will regain confidence in listing XRP again.
Meanwhile, the token traded at $0.86 in the Tokyo session Tuesday. XRP price declined by 9.5 percent in the last 24 hours.
The SEC vs Ripple lawsuit saga has kept the whole crypto community watching closely for over 6 months.
The outcome is not yet clear. However, attorney Jeremy Hogan is convinced it will end with a settlement soon enough. The law enforcement agency claimed Ripple should have seen the lawsuit coming, citing precedents of other 75 lawsuits and actions. However, the blockchain company is convinced their case is unique and pushed their rights for a fair notice defense.
Moreover, the SEC has not yet presented the internal documentation regarding their mentions of XRP and Bitcoin, and Ethereum as leading cryptos. Should the documents reveal the SEC referring to them as currencies and not securities, the prosecution might have trouble pushing their case.
Magistrate Judge Sarah Netburn compelled the SEC to hand over the mentioned documentation at the beginning of May 2021. Unfortunately, no documents have been presented as of the moment.