The case brought by the United States Securities and Exchange Commission (SEC) against Ripple, a company based in San Francisco, placed on the blockchain, has been the subject of various negotiations and developments recently. In a court filing, Ripple argued that the recent US Supreme Court ruling in Bittner v. The United States is reinforcing its “equal notice” argument, which could be a key point for the company’s defense in the ongoing trial.
In a letter filed last Friday in US district court, Ripple noted that a recent US Supreme Court ruling in the Bittner case highlighted that the SEC did not provide “adequate notice” before commencing enforcement action. Ripple argued that this ruling was based on its “fair notice” defense and that the SEC failed to notify Ripple that its actions violated the law before taking legal action.
The “fair data” defense argues that the lack of clear information on how securities laws apply to cryptocurrency assets is causing regulatory uncertainty in the market. Ripple contends that the SEC has failed to articulate a clear framework for the growing cryptocurrency industry, making it difficult for blockchain companies to comply with regulations.
The US Supreme Court observed that “it is a fair warning to the world, a common language the world will understand, of what the law intends to do, if a certain line is crossed.” Ripple contends that the SEC failed to provide this fair warning before legal action, which violates the US Constitution’s due process.
The final decision on whether Ripple, with its current and former CEOs Brad Garlinghouse and Chris Larsen, respectively, broke the law for more than $1.3 billion after selling XRP cryptocurrency securities risk-free, is now pending before Judge Analisa Torres. If a judge deems Ripple selling XRP as a security without any, this recent US Supreme Court ruling would give the “equal notice” defense “a little more muscle.”
Despite the protracted litigation, the recent US Supreme Court ruling is pivotal to Ripple’s case. A final decision on the case could take up to two months. Either way, if the judge’s summary ruling is enforced, it will have a major impact on determining which cryptocurrencies should be pledged under US federal securities laws.
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