In
the
latest
development
of
the
high-stakes
legal
battle
between
the
Securities
and
Exchange
Commission
(SEC)
and
Ripple
Labs,
the
SEC
has
boldly
responded
to
Ripple’s
recent
legal
filing.
On
July
3,
2024,
the
SEC
submitted
a
new
document
to
the
United
States
District
Court
for
the
Southern
District
of
New
York,
aimed
at
countering
the
company’s
reliance
on
a
recent
ruling
from
the
case
against
Binance
Holdings,
Ltd.
to
argue
against
harsh
penalties
in
its
ongoing
case.

SEC
Counters
Ripple

The
SEC’s

filing,
authored
by
Jorge
Tenreiro,
sharply
criticizes
Ripple’s

interpretation
and
application
of
the
Binance
ruling.
Tenreiro
points
out
that
the
firm’s
citation
of
the
Binance
decision
is
misguided
and
irrelevant
to
the
issue
at
hand,
stating:
“This
‘authority’
is
a
ruling
on
a
motion
to
dismiss
in
SEC
v.
Binance
Holdings,
Ltd.,
that
is
wholly
irrelevant
to
the
pending
motion
on
remedies.”

 

Tenreiro
further
emphasizes
the
disconnect
in
the
firm’s
argument
by
noting
that
it
“highlights
one
observation
in
the
nearly
90
pages
of
the

Binance
ruling,
and
tries
to
extrapolate
from
that
general
observation
about
the
efficiency
of
the
SEC’s
litigation
strategy
[…]
the
notion
that
Ripple
did
not
act
with
‘reckless
disregard
for
the
law’
such
that
‘harsh
remedies’
are
not
warranted.”
He
critiques
this
approach
by
affirming
that
“this
plainly
does
not
follow.”

The
SEC’s
filing
also
accuses
the
firm
of
omitting
crucial
elements
of
the
Binance
ruling
that
undermine
their
argument.
Specifically,
the
Binance
court’s
rejection
of
the
fair
notice
defense
parallels
the
Ripple
case.
The
SEC
quotes
the
Binance
ruling,
noting,
“It
was
‘notable’
that
the
defendants
were
alleged
to
have
actual
notice
that
the
SEC
could
pursue
them,”
which
aligns
closely
with
the
SEC’s
argument
that
the
company
had
received
ample
warning
through
legal
advisories
regarding
the
sale
of
XRP.

Moreover,
the
SEC
recalls
previous
court
findings
that
have
consistently
held
that
Ripple
was
indeed
aware
of
the
potential
securities
implications
of
their
actions.
The
agency
further
noted
in
its
response
that,
like
in
Ripple’s
case,
the
Binance
court
confirmed
that
the
crypto
industry
had
been
adequately
notified
of
the
regulatory
framework
through
the
SEC’s
DAO
Notice
of
July
2017.

 

This
directly
challenges
the
fintech’s
stance
on
the
lack
of
regulatory
clarity,
emphasizing
that
the
SEC
had
clearly
signaled
its
regulatory
intentions,
which
should
not
have
been
unexpected
to
Ripple.This
point
is
crucial
for
the
SEC’s
argument
for
stricter
penalties
of
more
than
$2
billion,
contrary
to
Ripple’s

contention
that
the
civil
penalty
should
not
exceed
$10
million.

Notably,
the
ongoing
case
has
broader
implications
for
the
crypto
industry,
particularly
in
how
digital
assets
are
regulated
and
the
enforcement
actions
that
can
be
expected
from
US
regulators.
The
SEC’s
recent
filing
underscores
their
target
to
establish
oversight
over
the
crypto
industry.

At
press
time,
XRP
traded
at
$0.45729.

Featured
image
created
with
DALL·E,
chart
from
TradingView.com

Go to Source
Author: Jake Simmons

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