- SEC filed a letter to remove the allegations regarding “due process and advance (fair) notice”, as Ripple argued.
- SEC counters Ripple stating that one regulator’s decision holds no relevance concerning another.
- SEC believes Ripple is trying to avoid liability for its unregistered offering by diverting the Court’sCourt’s attention.
On the 9th of March, US Securities and Exchange Commission (SEC) filed a petition for deleting their former lawsuit against the Californian FinTech firm, Ripple, Inc., claiming the sale of XRP tokens as an unregistered securities offering.
SEC vs Ripple
Previously, the SEC filed a suit against Ripple, alleging an illegal distribution of XRP to investors. Ripple then responded with a document submission claiming “due process and advance (fair) notice” as an issue. It explained, Ripple didn’t receive any notice of ”violation of the securities law” in advance as part of the due process. In light of these recent changes, the SEC agreed that it did not follow the right procedure and thus filed its latest suit for deleting the previous one.
Reason Behind SEC’s Decision for Deletion
Based on the Howie test, SEC claims that there is NO uncertainty about the securities of XRP. However, the SEC decided that if the suit weren’t valid legally due to lack of grounds, it would file for suit deletion.
Additionally, Ripple argued that XRP is regarded as a virtual currency by the U.S. Department of Justice and the U.S. Treasury Department’s FinCEN. But the SEC called-off their argument, saying that one regulator’s decision holds no relevance concerning another; it’ sits just a matter of opinion.
The SEC also told the court that last week, Brad Garlinghouse and Chris Larsen, Ripple CEOs, filed a request for withdrawal of their suit, which, along with their other claims, also mentioned: “fair notice” -related issues.
It’s Not Over Yet!
SEC strongly believes Ripple is trying to avoid liability for its unregistered offering by diverting the Court’s attention. Firing blind shots with several defence arguments, all under the name of ”fair notice”. Still, to rectify their error, the SEC filed the deletion petition.
Court has passed the SEC’s proposal. And the further procedure is expected to take place in the following order:
- Submission of a statement of opinion by both parties within 30 days.
- Submission of objection document on the 30th.
- This followed by a counter-argument period of 2 weeks.
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