Ripple Labs continues to put up a vigorous fight against the U.S. Securities and Exchange Commission (SEC), and their most recent filing is no exception, as they confidently and forcefully respond to the SEC’s Letter of Supplemental Authority regarding the regulator’s Motion for Summary Judgement.
In a recent development in the ongoing legal dispute between the US Securities and Exchange Commission (SEC) and Ripple Labs, the SEC cited a distinct enforcement action against investment advisory firm Commonwealth Equity Services to strengthen its case. Ripple’s legal team has responded promptly, contending that the cited case has no bearing on their reasonable notice defense.
On April 11, the SEC addressed the judge presiding over the case, emphasizing the Commonwealth’s judgment that a long-standing court precedent provides sufficient fair notice.
The SEC argued that the precedent that led to the development of the Howey test provides adequate notice to Ripple Labs regarding what constitutes security. The SEC further argued that its case against Commonwealth provides additional authority to reject Ripple’s fair notice defense.
However, on April 13, Ripple’s legal team filed a response arguing that the cited Commonwealth case does not provide additional authority for rejecting their fair notice defense. The letter addressed to the Honourable District Judge Analisa Torres outlined the distinctions between the two cases.
Ripple’s defense emphasized the lack of contemporaneous evidence in the Commonwealth case, whereas Ripple’s situation is supported by extensive evidence, including communications from the SEC to third parties, indicating that reasonable market participants did not view Ripple’s offers and sales of XRP as investment contracts.
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