A recent development in the case of Ripple and the SEC, that saw two independent defendants file a letter to have their connection with the case summarily dismissed, may turn the case in Ripple’s favor.
In a letter filed by co-founders of Ripple, Bradley Garlinghouse and Christian A. Larsen asked the court to dismiss their involvement in the SEC suits against their company Ripple Labs on grounds that a recent letter published by SEC commissioners Hester Peirce and Elad L. Roisman implied that the SEC did not provide fair warning to them of being in violation of the law.
Attorney Jeremy Hogan discussed the implications of the new filing to the original Ripple case. In a YouTube video, he states that the letter is “a Godsend” for Ripple as it could turn around the case in their favor.
Ripple’s current plea in the case against them raises two significant issues, namely, that they did not sell unregistered securities in their sale of XRP tokens and that even if they did, the SEC failed to provide them fair warning of their actions violating any regulatory laws. Notably, the SEC too failed to provide evidence of giving them a warning.
The SEC’s letter and the new filing of the co-founders’ references seemed to imply that even until now, the SEC regulations on securities are still unclear on how they apply to cryptocurrencies and fail to provide fair notice to crypto businesses. The commissioners were commenting on a recent settlement the SEC reached with another cryptocurrency firm, Coinschedule.
This seems to be another small win for Ripple. Recently, the court also granted Ripple permission to depose the former SEC director, William H. Hinman, who was instrumental in declaring Ethereum’s Ether to not be a security. Although the court placed limits on what can be asked during the deposition.
In the opinion of Hogan, though the filing is in an entirely new case, it will surely be brought up by Ripple in their own defense. He also seems to think the action of the two SEC commissioners in writing such a damning letter against their firm was intentionally aimed at speaking up to help the cryptocurrency industry.
With two out of five of the SEC commissioners stating that the regulatory watchdog does not currently have clear laws to apply to cryptocurrencies today, Ripple’s defence of not receiving fair warning might fly.