SEC Commissioners drop bombshell that could save Ripple from lawsuit over sale of XRP
“Although the commission has provided some guidance, the large number of factors cut against the clarity the guidance was intended to offer.”
It turns out that two of the five SEC Commissioners acknowledge today that the regulatory status of digital assets remains so characterized by a “decided lack of clarity”, said Brad Garlinghouse and Chris Larsen’s counsel in a letter to the court.
The document refers to SEC Commissioners Hester Peirce and Elad L. Roisman, who publicly stated that “the only certainty we see is that people have questions about how to comply with the applicable laws and regulations”.
The individual defendants will be using the Commissioners Peirce and Roisman’s statements regarding Coinschedule as part of their motion to dismiss the lawsuit against them.
The authoritative voices of both Commissioners are likely to weaken the SEC’s position before the court. Other key quotes from their statement include:
- “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.”
According to the individual defendants’ counsel, Matthew Solomon, the statement confirms that charging Garlinghouse and Larsen with an offense that requires knowledge or recklessness was and is legally untenable.
This supplemental authority was filed on behalf of the individuals who filed to dismiss the lawsuit, not for Ripple, but the latter will surely ask the court to take “Judicial Notice” of the letter.
Ripple’s fourth affirmative defense is that the Securities and Exchange Commission failed to provide fair notice that its conduct was in violation of the law.
SEC Commissioners Hester Peirce and Elad L. Roisman have offered quite a treat to the Defendants as the case is widely watched by the fintech and trading industry in the United States and elsewhere.
Also ahead in the SEC v. Ripple case is the deposition of William Hinman, July 27. Despite the probable stream of objections claiming privilege, there are expectations that the ex-SEC Director will help clarify what happened during the time of his speech in 2018 when he said Ether is not a security.