- The US Securities and Exchange Commission (SEC) has forcefully responded to Ripple’s latest legal maneuver by addressing the defendant’s supplemental authority notice.
- Ripple had earlier referenced a recent ruling involving Binance, aiming to critique the SEC’s regulatory tactics and emphasize the lack of clear guidelines for crypto projects.
- In a pointed rebuttal, the SEC’s representative, Jorge Tenreiro, labeled Ripple’s reference to the Binance case as “completely irrelevant” to the ongoing legal motions.
The SEC responds to Ripple’s supplemental authority notice, dismissing its relevance and reinforcing the urgency of regulatory clarity in the crypto sector.
The Core of SEC’s Rebuttal Against Ripple’s Argument
The Securities and Exchange Commission has not held back in its response to Ripple’s citation of the Binance case. Ripple’s defense highlighted the inefficacy of the SEC’s regulatory approach, suggesting it contributes to ambiguity within the crypto industry. However, the SEC firmly dismissed the relevance of this argument, emphasizing that it does not pertain directly to the remedies under current litigation. Jorge Tenreiro from the SEC underscored the incongruity of incorporating the Binance example in Ripple’s defense strategy.
Dissecting the SEC’s Position on the Fair Notice Doctrine
In its detailed response, the SEC highlighted Ripple’s selective omission of a pivotal aspect of the Binance ruling, one that rejects the applicability of the fair notice doctrine as a shield against liability. The ruling reinforced that the SEC was upholding well-established federal securities laws. Furthermore, the 2017 DAO report was cited as evidence that the crypto market had been adequately cautioned about compliance requirements well prior to the bulk of Ripple’s XRP transactions.
Ripple’s Legal Counsel and Advice on Potential Liabilities
The SEC’s counterarguments did not stop at the procedural level; they also extended to the advice Ripple had received regarding its legal obligations. According to the SEC, Ripple’s counsel had previously warned the company about potential legal issues arising from its XRP sales. This advisory from legal experts constituted a significant notice to Ripple, undermining their defense that they were unaware of regulatory risks.
Comparing Penalty Expectations: SEC vs. Ripple
Moving beyond the immediate rebuttal, the SEC reiterated its stringent stance on financial penalties. While Ripple has argued that any civil penalty should not surpass $10 million, the SEC maintains that a more severe financial repercussion is warranted, initially suggesting a fine to the tune of $2 billion. This stark contrast in penalty expectations underscores the ongoing tension and the adversarial nature of the proceedings.
Conclusion
The SEC’s latest rebuttal in the case against Ripple underscores the broader challenges facing the crypto industry in achieving regulatory clarity. By emphasizing Ripple’s internal advisories and refuting the relevance of the Binance ruling, the SEC is steadfast in its enforcement actions. For the crypto sector, this ongoing legal battle spotlights the urgent need for more precise regulatory frameworks to prevent such contentious litigations in the future.
