SEC vs Ripple: Ripple Argues Fair Notice Defense in SEC Motion

Updated: 1 year

• The SEC filed a letter of supplemental authority in support of its motion for summary judgment against Ripple.
• Ripple has filed its response to the SEC’s letter, arguing that the Commonwealth case does not provide sufficient evidence to reject the fair notice defense.
• Ripple has presented a plethora of evidence from the SEC’s own filings and its communications with third parties to show that reasonable market participants considered XRP not to be an “investment contract.”

SEC Files Letter Of Supplemental Authority

The U.S. Securities and Exchange Commission (SEC) has filed a Letter of Supplemental Authority in support of its motion for summary judgment against Ripple, Bitcoinist reported. The Massachusetts District Court opinion in the case against Commonwealth Equity Services LLC, dated April 07, 2023 was cited by the SEC as confirming that the Howey test does not require a separate fair notice to Ripple.

Ripple Responds To The Letter

Ripple has responded to the SEC’s letter, detailing why they believe that the Commonwealth case does not provide “additional authority” for them to reject their fair notice defense. Evidence presented by Ripple includes their own timely evidence on the fair notice defense, as well as information from SEC guidance and paid expert witness testimony from third parties which shows that reasonable market participants considered XRP not to be an “investment contract.”

Differences Between Cases Noted

Ripple claims that there are obvious differences between their case and Commonwealth’s which is why they are able to refute some of what the SEC is arguing. Unlike Commonwealth, Ripple provided timely evidence on their fair notice defense while also citing SEC guidance and presenting a paid expert witness showing how XRP was never considered an investment contract by reasonable market participants.

SEC Arguments Rejected By Court

The court had previously rejected some arguments made by the SEC regarding disclosure requirements when it comes to this case. Furthermore, it is still uncertain whether or not regulations under the Securities Act even apply in this situation at all which further weakens some of what was being argued by them.

Ripple Continues To Fight Back Against The SEC

Ripple continues to fight back against these allegations made by the US authority and will continue to present evidence in order to prove their innocence when it comes to these accusations made against them regarding XRP being classified as an “investment contract.”

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