- Ripple filed a Notice of Supplemental Authority, referencing the Binance ruling.
- The SEC responds, claiming that the Binance ruling is wholly irrelevant in the XRP case.
- The regulators clarified their stance by pointing out the court’s statement about the SEC’s 2017 DAO report.
The ongoing legal battle between Ripple and the SEC has escalated in recent days, particularly after Judge Jackson’s ruling on Binance’s BNB token. In the latest development, the SEC has criticized Ripple’s attempt to introduce the Binance case into the ongoing Ripple lawsuit.
Ripple Labs and the SEC have made significant progress in their legal battle, with the SEC filing its reply in the lawsuit’s remedies stage. In the response to the remedies brief, the SEC had challenged Ripple’s insistence that the blockchain startup acted without recklessness and that there should be no “widespread uncertainty” about the legal status of XRP despite the court previously rejecting this “fair notice” defense.
Defense attorney James Filan shared an X post a snippet of the SEC’s response to Ripple’s Notice of Supplemental Authority. The regulators dismissed Ripple’s arguments, citing the recent Binance ruling as “wholly irrelevant” to the current motion.
The SEC contends the Binance ruling is irrelevant because it does not address the specific issue of whether XRP itself is a security, which is central to the Ripple case. This distinction highlights the ongoing debate over the classification of digital assets.
The latest twist in the case began with Judge Amy Berman Jackson’s ruling on Binance’s BNB token, which referenced Judge Analisa Torres’ XRP ruling. While upholding other charges against Binance, Judge Jackson dismissed those related to secondary sales of BNB. The ruling has been widely seen as a major victory for the crypto community and XRP supporters, reinforcing the XRP ruling.
Following the ruling, Ripple filed a Notice of Supplemental Authority in the ongoing case, referencing the Binance ruling to bolster its position. Ripple also argued against inconsistencies in the Howey test and the lack of clear guidance on cryptocurrencies. Ripple asserts that this lack of clarity unfairly disadvantaged them, as they were not provided with sufficient notice that their actions might be considered illegal.
In its filing, the SEC pointed out that Ripple overlooked a significant part of the Binance ruling that discussed the fair notice doctrine. According to the ruling, the fair notice doctrine does not offer a defense against liability. The SEC argued that Ripple mischaracterized the Binance ruling regarding the fair notice doctrine. The SEC asserted the doctrine does not absolve a defendant of liability if they violated securities laws, even if those laws were unclear.
Furthermore, the Binance ruling reportedly revealed that the SEC was enforcing a “decades-old federal securities statute.” The agency clarified its stance by highlighting the court’s key statement about the SEC’s 2017 DAO report, which alerted crypto exchanges to the regulations. The SEC’s filing emphasizes that the Binance ruling affirmed the regulator’s authority over sales of crypto assets to institutional investors, a key aspect of the SEC’s case against Ripple.
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