- Attorney John Deaton called the Ripple-SEC lawsuit as one of the most significant non-fraud SEC enforcement actions.
- Ripple and SEC are currently battling arguments in the court over the consideration of the ‘fair notice’ defense.
It’s more than two years now since the US SEC slapped a lawsuit on blockchain startups for the sale of their XRP tokens as unregistered securities. Ripple has been defending its position of no wrongdoing while the SEC hasn’t been able to prove its charges against the crypto firm.
Amid the multiple heading in the court, the U.S. Securities and Exchange Commission (SEC) finds itself in the backseat facing back-to-back defeats in the United States apex court. Attorney John Deaton, who’s been closely following the Ripple case has called for patience from the XRP community, reiterating that the ongoing lawsuit is the most-significant non-fraud SEC enforcement over the last seven decades.
Deaton Calls for Patience.
“He reiterated that the ongoing Ripple vs. SEC lawsuit is the most significant non-fraud SEC enforcement action since 1946, the period of the Howey case.” pic.twitter.com/mdI1pHMQew
— 🇳🇱 MackAttackXRP® XRP 🇳🇱 58K-XRP-Followers (@MackAttackXRP) April 17, 2023
SEC and Ripple Clash Over ‘Fair Notice’ Defense
Ripple has recently argued that the ‘fair notice’ defense applies to its XRP offerings. As per US law, a defendant in certain circumstances will have a positive defense to accusations of law-breaking and if they can prove that they lacked fair notice that their conduct violated the law.
However, some recent judicial decisions suggest that the fair notice defense won’t be applicable in Ripple’s case. During this week’s hearing, the SEC drew the court’s attention to some of these hearings. The securities regulator told the court that the defendant aka Ripple can’t rely on a ‘fair notice’ defense since the SEC’s charges were based on a 50-year-old Supreme Court precedent.
Thus, the SEC wants to convey that the failure of the agency to impose rules in the past should not mean the freedom to violate rules in the present. Given the fact that the SEC’s charges are based on the Howey Test, which is a decades-old Supreme Court percent, the agency said that the court should reach the same decision.
In its response to the filing in the court, Ripple argued that the outcome of the ‘fair notice’ defense in the SEC vs Commonwealth case would not be applicable to them since the defendants “adduced no contemporaneous evidence supporting its defense that market participants lacked fair notice.
It will be interesting to see what Judge Torress has to say on the matter during the upcoming court hearings.
SEC has Been Losing Multiple Cases Recently
As the SEC vs Ripple continues to drag further, it has come to the public’s attention that the securities regulator has lost five of the six cases recently. Ripple’s chief legal officer Stuart Alderoty pointed out the same.
Update: The SEC has lost 5 of its last 6 cases in the Supreme Court. SEC v Cochran (4/14/23) https://t.co/SpGbRZ3V2E
— Stuart Alderoty (@s_alderoty) April 14, 2023
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As the Ripple vs SEC case has come closure to a conclusion, it will be interesting to see whether or not the SEC would be losing yet another case in the market.
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