Ripple Labs has filed a notice of supplemental authority to strengthen its position in ongoing legal action with the Securities and Exchange Commission (SEC). This filing was made in the United States District Court for the Southern District of New York in response to the SEC’s motion for relief and final judgment.
Ripple Takes Binance Dominance
The core of the defense is based on a recent decision from the US District Court for the District of Columbia in SEC v. Binance Holdings, Ltd., No. 1:23-cv-01599-ABJ-ZMF. Binance’s decision, issued on June 28, 2024, partially acknowledged and denied the SEC’s allegations that Binance engaged in the sale of unregistered securities.
The court ruled that the SEC did not present sufficient evidence to show that secondary market transactions involving BNB tokens in crypto exchanges qualified as securities transactions. Ripple cites this decision as a key reference, arguing for its validity because of its analytical similarities to its ongoing litigation.
In their detailed reference to the Binance decision, Ripple’s legal team highlights the important opinion of the Binance court: “[I]Tangible digital assets do not fit neatly into the seven-page rubric that encompasses Howey’s vision.” This statement underscores an ongoing theme in digital asset management, pointing to the complex nature of applying common securities law to modern digital assets.
The court’s criticism of the SEC’s approach to small-scale litigation was noted in the preamble, which said, “Again, the agency’s decision to oversee this multibillion-dollar industry through litigation — case by case, coin by coin, court by court — is probably ineffective. way forward, and risks inconsistent results that can leave relevant parties and their potential customers without clear direction.” This reflects widespread criticism within the cryptocurrency industry about the SEC’s regulatory strategy.
In addition, Ripple is contesting legal clarifications regarding the legality of the XRP sale, which was emphasized as a critical consequence of the court’s previous summary judgment. “These observations support Ripple’s contention that providing clarity on the legality of various types of XRP sales was the most important aspect of the Court’s summary judgment,” the filing said. Ripple asserts that such clarification is important not only for its operation but for the cryptocurrency market in general, emphasizing that the regulatory clarification before the court decision supports their position against heavy penalties.
The filing also touches on the nature of Ripple’s alleged violations, arguing that the SEC’s inability to establish negligence on Ripple’s part should limit the severity of any proposed remedies. “The lack of regulatory clarity prior to that decision supports Ripple’s position that the Court’s finding of strict liability violations in Ripple’s other transactions — but far fewer than the SEC’s alleged violations — does not demonstrate disregard for the law,” the company’s lawyers argued.
This supplemental notice was filed by Michael K. Kellogg of Kellogg, Hansen, Todd, Figel, & Frederick PLLC, and Debevoise & Plimpton LLP, acting as counsel for Ripple Labs. recent SEC proposals but also to confirm. company-wide debates about the application of securities laws to cryptocurrency trading—a focus of legal, regulatory, and academic debate as digital assets continue to challenge traditional structures.
At press time, XRP traded at $0.47979.
The featured image was created with DALL·E, a chart from TradingView.com
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