XRP Lawsuit Update : SEC’s Reply Memo in Ripple Case, Laughable Claims or Legal Strategy?

1 year ago 104

The post XRP Lawsuit Update : SEC’s Reply Memo in Ripple Case, Laughable Claims or Legal Strategy? appeared first on Coinpedia Fintech News

On Friday, the U.S. Securities and Exchange Commission (SEC) filed a 29-page reply memorandum, pleading for an interlocutory appeal aimed at halting the entire case against Ripple. The SEC argues that Ripple is actually prolonging the case to continue selling XRP, despite filing an appeal that threatens to further extend the legal timeline.

What’s Wrong With the SEC’s Move

After a federal judge called them hypocrites and publicly stated that they lack a faithful allegiance to the law, you would think lawyers like @GurbirGrewalNJ as @SECEnfDirector, or senior SEC enforcement lawyer Jorge Tenreiro, would take pause, measure and reevaluate, how they… https://t.co/dDwVdl0ejK

— John E Deaton (@JohnEDeaton1) September 8, 2023

John Deaton, the Lawyer and founder of CryptolawUS, commented that the SEC’s recent actions, including filing an interlocutory appeal and a motion for a stay, are not only contradictory but also counterproductive to their own claims of seeking a swift resolution.

He stated, “The SEC’s professional embarrassment continues,” accusing the regulatory body of wasting judicial resources rather than conserving them.

James K. Filan added, “The SEC’s argument that Judge Torres should stay the proceedings because the SEC is suddenly concerned about conserving judicial resources is laughable.”

Filan points out that the SEC’s argument appears inconsistent and raises questions about the agency’s approach to the case. He likens it to previous controversial arguments made by the SEC, such as claiming that William Hinman’s speech was not guidance and asserting attorney-client privilege for Hinman’s communication.

The Continued Application of the Howey Test

At the core of this lawsuit is the SEC’s application of the Howey Test to determine whether XRP, Ripple’s native token, constitutes a security. In a somewhat surprising claim, the SEC posits that Ripple’s defense did not cite a single Howey-related opinion to contest the legal questions involved in the case.

As John Deaton points out, the pursuit of an interlocutory appeal itself stands to add a procedural layer to an already complex case. He predicts that the agency will inevitably lose ground, especially when it comes to applying the common enterprise factor to programmatic and secondary sales of XRP. Judge Torres is likely to uphold her decision, and the SEC will face another setback.

Impact on Ripple Investors

What’s glaringly absent in this unfolding drama are the real victims: millions of XRP investors. As Ripple’s XRP remains in legal limbo due to the ongoing legal disputes, the SEC appears unfazed by the fallout. Gary Gensler and his SEC team seem to have little concern for the widespread impact their actions are having on market stability and investor trust.

As the SEC vs. Ripple case continues to evolve, the SEC’s latest move is harming investors rather than protecting them. The crypto industry urgently needs regulatory clarity as it faces increasing scrutiny.

Read Entire Article