The U.S. Securities and Exchange Commission has responded to Ripple’s recent defense, accusing the company of misinterpreting the law in its most recent filing to win the lawsuit. Ripple claims that SEC failed to fairly notify it about treating XRP as a security. However, the US Securities and Exchange Commission claimed that the more than 70 other lawsuits it has filed against other crypto companies should be enough to remind Ripple that XRP is a security.
Fair Notification Battle
Ripple’s chances of winning in a legal showdown are ingrained in its ability to claim a lack of fair notification. This defense strategy relies on convincing the court that the regulator has failed to fulfil its duty to notify Ripple of its securities violations.
However, the SEC dismissed that defense, claiming that the 70+ lawsuits it filed against other crypto companies were enough to let Ripple know they were false.
Ripple’s most recent document alleged that its case was unique and completely different from the other 75 lawsuits brought by the SEC. His lawyer stated:
“This is the very first case in which the SEC has ever brought an enforcement action against a company or its individual executives for selling or distributing an established digital asset alleging that Section 5 of the Securities Act required registration of such sales.”
The US Securities and Exchange Commission hopes the court will reject this defense. In response to Ripple’s sur-reply, the SEC alleged that Ripple intentionally misinterpreted the law.
“#XRPCommunnity #SEC_NEWS v. #Ripple #XRP The SEC has filed a one-page response to Ripple’s sur-reply to the SEC’s Motion to Strike Ripple’s Fair Notice Affirmative Defense.”
The regulator stated:
This argument is based on the misrepresentation of the “fair publicity” objection. Ripple’s reasoning boils down to the following: Since none of the SEC’s previous digital asset cases revealed the exact same facts as this case, Ripple lacks adequate reasonable notice and cannot, therefore, be held liable for any violations of the strict liability provisions of Section 5.
In a unilateral response to Judge Analisa Torres, the regulator added, “But fair notification does not require such accurate factual correspondence, and Ripple has not cited cases to the contrary.”
The SEC believes that prior cases, such as the well-known Howey lawsuit – the basis for Howey’s assessment of whether assets are securities – have been adequately announced. She further alleged that she had given sufficient “guidance on her regulator and the scope of her enforcement powers”.
“It’s a pathetic response.”