Ripple referenced Judge Berman’s recent opinion on secondary market sales in the Binance case. Ripple argues that this opinion is pertinent to its opposition to the SEC’s motion for remedies in the ongoing lawsuit.
The recent judgment by Judge Amy Berman Jackson last weekend stating that the secondary market sales of BNB don’t constitute securities has got other market players on their toes. In a similar stand to that of Coinbase, Ripple Labs is now using the Binance win to challenge the US Securities and Exchange Commission (SEC) arguing that the regulatory approach needs more clarity and consistency.
Ripple stated that it is necessary for the SEC to come up with formal rulemaking and define the regulatory scope for digital assets.
In a letter to Judge Torres, Ripple referenced Judge Berman’s recent opinion on secondary market sales in the Binance case. Ripple argues that this opinion is pertinent to its opposition to the SEC’s motion for remedies in the ongoing lawsuit. Ripple asserts that Judge Berman’s ruling supports their stance and should be considered in the evaluation of the SEC’s claims.
#XRPCommunity #SECGov v. #Ripple #XRP @Ripple has filed a Notice of Supplemental Authority regarding the recent Binance decision.https://t.co/tSEQXTxrWU
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) July 2, 2024
Earlier this week, crypto exchange Coinbase argued how two different courts could announce diametrically opposite judgments for the top two exchanges facing legal lawsuits on a similar matter. Coinbase has expressed concerns about the SEC’s broad interpretation of securities laws as they apply to the crypto industry. The exchange argues that this expansive application lacks definition and calls for a definitive rulemaking process to provide legal clarity.
Ripple Points Out Misalignment with SEC’s Howey Test
In the latest court filing, Ripple highlighted the observation by Amy Jackson that digital assets do not fit neatly within the existing securities laws, such as the popular 1946 Howey Test. This test is essential in determining whether a transaction qualifies as an investment contract and is therefore subject to securities regulation. Ripple noted:
“The lack of regulatory clarity prior to that ruling in turn supports Ripple’s position that the Court’s finding of a strict liability violation on some ofRipple’s sales – but far fewer than the SEC alleged were violations – does not reflect a reckless disregard for the law or warrant harsh remedies.”
Binance’s partial victory in its SEC lawsuit has become a strategic benchmark for other crypto entities facing legal challenges with the regulator.
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