It’s never boring to follow the U.S. Securities and Exchange Commission’s (SEC) misguided enforcement action against blockchain startup Ripple in San Francisco, and Friday brought about yet another development in the case.
In court filings, Ripple contended that the recent Bittner v. United States decision by the U.S. Supreme Court supports their claim of fair notice.
In support of its request in the ongoing legal battle with the SEC, Ripple on Friday submitted an additional letter to the U.S. District Court.
Ripple stated that the Bittner case ruling from the Supreme Court on Tuesday emphasized that the SEC had not given “fair notice” before commencing its enforcement action, which limits the government’s power to fine US taxpayers who fail to declare overseas bank accounts.
“A reasonable warning should be provided to the public in terms that the common world would understand, of what the law plans to do if a specific boundary is passed,” As stated by the Supreme Court in the Bittner case.
At the pre-trial phase of the SEC v. XRP dispute, Ripple’s attorneys made it clear that the SEC had rejected fair notice for crypto assets in general as well as XRP. The SEC filed a number of hurried documents in an effort to block Ripple after it declared its intention to provide a fair notice defense. Nevertheless, the court eventually gave Ripple permission to defend itself using fair notice.
According to this claim, the SEC did not alert Ripple to the fact that its acts were illegal before taking legal action. The company said that the United States’ chief financial officer failed to create a clear framework for how securities laws should be applied to the rapidly expanding crypto business, leading to regulatory confusion in the market.
When determining whether Ripple, along with its current and former CEOs Brad Garlinghouse and Chris Larsen, respectively, broke the law by raising more than $1.3 billion after selling the XRP cryptocurrency as unregistered securities, Ripple has asked presiding judge Analisa Torres to take the Supreme Court’s ruling into consideration.
Creator of the news source Crypto-Law Amicus curiae in the XRP lawsuit John E. Deaton recently discussed market observers’ theories that Ripple sent this letter now because they know the SEC will win. Deaton mentions that the decision by the US Supreme Court was made just four days ago. He argues that this court ruling supports Ripple’s contention that the Due Process section of the US Constitution is violated by the absence of fair notice.
This most recent Supreme Court decision strengthens Ripple’s fair notice position, according to Deaton, if District Judge Torres determines that the business offered XRP as an unregistered security.
The lawyer reaffirmed his conviction that Ripple will prevail in a decision by the current Supreme Court. The most recent Supreme Court decision is the proverbial cherry on top for the company’s case, even if the West Virginia EPA action alone gives cause to assume Ripple will ultimately prevail in the protracted legal struggle.
Judge Torres’ ruling on the complaint is anticipated to come soon, but it might take up to two months. Yet, the court’s decision will significantly impact which cryptocurrencies should be treated as securities for the purposes of U.S. federal securities laws if the judge grants the summary judgment.