Attorneys for Ripple Labs Inc. filed a response with a federal judge Monday asserting the U.S. Securities and Exchange Commission is misapplying a recent ruling in another case in an attempt to deprive Ripple of an affirmative defense in the ongoing lawsuit, SEC v. Ripple Labs Inc.
Fast facts
- In Monday’s letter, Ripple argued the SEC is wrongly applying the outcome of another case, SEC v. Fife. Specifically, Ripple argues its defense is “a completely different procedural posture” from Fife’s.
- Last week, the SEC made a motion to strike Ripple’s fair notice defense citing the Fife case, in which a federal court on Dec. 22 sided with the SEC and dismissed a penny stock investor’s fair notice defense. That court rejected “the same ‘fair notice’ argument Ripple asserts in this case…,” the SEC stated.
- The SEC filed its suit against Ripple and two executives in 2020, alleging its XRP token is an unregistered digital asset security. Ripple’s defense is that it did not receive fair notice that the SEC considered XRP to be in violation before it sued Ripple, and therefore deprived Ripple of its due process rights.
- The closely watched SEC v. Ripple Labs’ case is expected to be decided or settled this year and will likely determine whether XRP is a security or a digital currency. Crypto investors question why Bitcoin and Ether have not been held to the same standard.