Ripple gains higher ground for XRP, SEC plagued with top-level infighting

Rick Steves

The bombshell comes in good timing for the Ripple counsel, who will have ex-SEC Director William Hinman depose on July 27 in order to further strengthen its fair notice defense. 

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Ripple has requested the Court to consider the recent bombshell from SEC Commissioners Hester Peirce and Elad Roisman in support of the defendant’s opposition to the SEC’s pending motion to strike Ripple’s fair notice defense.

In other words, Ripple is using the Commissioners admission of lack of clarity in the crypto space in support of its fourth affirmative defense in the SEC v. Ripple Labs.

Individual defendants Brad Garlinghouse and Chris Larsen had recently filed the same public statement in support of their motion to dismiss the case against them.

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Counsel Matthew Solomon highlighted a few of Peirce and Roisman’s strongest sentences, indicating that at least two of the five Commissioners in the agency have concluded that the people and the marketplace are confused with the lack of an objective regulatory framework:

  • “Although the commission has provided some guidance, the large number of factors cut against the clarity the guidance was intended to offer.”
  • “People can study the specific cases but “applying those clues to the facts of a completely different token offering does not necessarily produce clear answers.”
  • “[P]roviding clear regulatory guideposts and then bringing enforcement actions against people who ignore them is a better approach than the clue-by-enforcement approach that we have embraced to date and that today’s settlement embodies.”

The new Ripple filing in support of the Fair Notice defense states that “Commissioners Peirce and Roisman have candidly explained that there is a ‘decided lack of clarity for market participants around the application of the securities laws to digital assets and their trading”.

“It will be interesting to see how the SEC tap dances in its responses to the defendants’ filings about the Peirce and Roisman statement in view of the obvious infighting at the highest level of the Commission. The SEC needs to put its house in order”, said James K. Filan, an attorney linked to the XRP community.

The bombshell comes in good timing for the Ripple counsel, who will have ex-SEC Director William Hinman depose on July 27 in order to further strengthen its fair notice defense.

The following day, July 28, is the deadline for the requested response from SEC Chair Gary Gensler to Senator Elizabeth Warren. She has requested information about the regulator’s “authority to properly regulate cryptocurrency exchanges and to determine if Congress needs to act to ensure that the SEC has the proper authority to close existing gaps in regulation”.

That letter also sent shock waves of speculation regarding what could be deemed as an orchestrated powerplay to outflank the CFTC.

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