It has been a little over a year since the U.S. Securities and Exchange Commission charged Ripple and its two executives with conducting a $1.3 billion unregistered securities offering. As the case continues in 2022, the regulators have filed a Letter of Supplemental Authority in support of its Motion to Strike Ripple’s Fair Notice Defense.
This update was provided by the attorney James K. Filan, who also provided the copy of the letter and the case SEC was talking about.
The filing dated 6th January highlighted another case cited by the SEC called “Fife”. The regulators were using the court denial from this case to support its Motion to Strike Ripple’s Fair Notice Defense.
Motion to Strike refers to a request to a judge that part of a party’s pleading or a piece of evidence be removed from the record, as per the definition provided by Cornell Law school.
Fife case, as brought by the SEC was between the regulators and the defendant John M. Fife and five entities. As per the SEC,
“Fife rejected, at the pleadings stage, the same “fair notice” argument Ripple asserts in this case and that the SEC has moved to strike.”
The SEC added,
“Indeed, Fife rejected the defendants’ “fair notice” defense at the motion to dismiss stage despite acknowledging the lack of “binding authority” construing the term “dealer.””
SEC was trying to draw similarities between the two cases and hoped to apply its outcome to the ongoing Ripple’s case where they use the term “investment contract” by showing that the phrase has been bound by legal parameters since 1946.
“In Ripple’s case, binding authority construing the term “investment contract” has existed since 1946. W.J. Howey Co., 328 U.S. at 298–99. Thus, Fife provides additional authority for striking Ripple’s fourth affirmative defense.”
The SEC was trying to strengthen its position against Ripple’s defense wherein it had earlier claimed that the regulators did not give it fair notice about the sales of XRP.
XRP Army fighting SEC
While Ripple was fighting it out in the court with the SEC, the XRP army was ready to take it up amid people. For the same, it was now rallying to get Attorney John Deaton on the Joe organ podcast.
Deaton has remained a prominent figure in opposing the SEC lawsuit and enacted Amicus Curiae for 65,000 XRP holders. This allowed the investors to voice their opinion in court. The XRP army has claimed the SEC not acting impartially as it termed XRP security while Bitcoin and Ether are given a free pass.
It cannot be denied that the XRP holders and investors will be affected as this lawsuit reaches an end. But the efforts taken by the community and Ripple, has kept the native token, XRP afloat. However, the general downtrend in the market has pushed XRP down by 16% in the first week of 2022 and it was currently trading at $0.7688.