Ripple has mounted a legal challenge to the U.S. Securities and Exchange Commission’s (SEC) request to appeal a district court ruling that disallowed the SEC’s case against Ripple. The cryptocurrency payments giant filed a new court document on May 27, 2021. It argues that the SEC’s lawsuit should be dismissed in full rather than being sent to an appeals court.
- 1. Ripple Files New Court Document Opposing SEC’s Further Appeals
- 2. Cryptocurrency Company Challenges Agency’s Delay of Legal Action
- 3. Ripple Argues Against SEC’s Motions in Court Filing
- 4. Ripple Seeks Resolution in Long-Standing Legal Dispute With SEC
1. Ripple Files New Court Document Opposing SEC’s Further Appeals
Ripple Labs has filed a new court document opposing the US Securities and Exchange Commission’s (SEC’s) attempts to further appeal a ruling that concluded they could not pursue a securities fraud action against the digital currency company. The court document was filed in the US Court of Appeals for the Second Circuit on Monday and highlights the importance of the underlying case.
In the court document, Ripple states that “the S.E.C. has failed to identify a single instance where the District Court erred and/or improperly exercised its discretion.” The company argues that the SEC has failed to show why the June 2020 ruling by US District Judge Analisa Torres should be undone, the argument being that the SEC’s filing of the appeal was meritless as the agency inconsistently asserted that XRP may be a security.
The SEC’s attempt to clarify its position has been interpreted by Ripple as an effort to protect its own internal legal oversight by misleading the public and the legal community. In the filing, Ripple states that “[t]he District Court held that, while the S.E.C. claims that XRP is a security, it has never put forth a legal justification for why XRP is a security.”
Ripple’s filing made four key requests, including that the SEC be denied further appeal rights or be subjected to additional legal proceedings if the court does not support their stance. Ripple also asked that the court declare whether the SEC is permitted to pursue the enforcement action should the appeals court affirm the ruling of the lower court. Ripple’s filing states that continued delay has hindered its ability to conduct business.
Ripple’s filing is the latest development in the ongoing legal battle between the company and the SEC, with both sides working to convince the courts that their position is the right one. Despite the legal battle, Ripple remains committed to providing its customers with a secure digital asset and financial services that improve the global economy.
2. Cryptocurrency Company Challenges Agency’s Delay of Legal Action
A cryptocurrency company has filed a lawsuit against the Financial Crimes Enforcement Network (FinCEN) for its delays in addressing the company’s effort to register as a money service business. The company alleges that FinCEN failed to comply with statutes and regulations, laying out the required timelines for registering companies seeking to become money service businesses.
The filing stated that FinCEN’s delays in response caused the company to receive an audit finding that requires the company to cease operations until the matter is resolved in court. The filing argues that the delay caused a “great injustice” and is asking the court to order FinCEN to make a decision on the company’s registration application.
The company’s complaint raised the points that FinCEN has not provided clear guidelines for the enforcement of the regulations, and that its actions were in violation of the Administrative Procedures Act, which states that an agency must act on an application for registration within a reasonable period of time. In addition, the filing raised the issue of whether the agency’s inability to make a decision was related to the agency’s policy to not register any new cryptocurrency companies.
- The filing argued that FinCEN’s delays in response caused the company to receive an audit finding that requires the company to cease operations until the matter is resolved in court.
- The company’s complaint raised the points that FinCEN has not provided clear guidelines for the enforcement of the regulations.
- The filing raised the issue of whether the agency’s inability to make a decision was related to the agency’s policy to not register any new cryptocurrency companies.
3. Ripple Argues Against SEC’s Motions in Court Filing
Ripple Labs Inc., the tech company behind financial network solutions specializing in cryptocurrency XRP, recently filed its legal answer and opposition against the U.S. Securities and Exchange Commission (SEC) shortly before a hearing on economic law related to the matter.
In its filing, Ripple stated that the SEC arbitrarily changed its interpretation of the law in favor of pursuing enforcement action against Ripple. The firm further argued that the Commission had declined to enforce the same interpretation against other similar enterprises.
Despite continuous statements declaring XRP a security, Ripple argued that XRP is actually a currency and is thus not under the Commission’s jurisdiction. Ripple also argued that the SEC was unlawfully creating a single, untested digital asset standard and further alleged that the Commission could not prove that it was harmed by Ripple’s activities.
Ripple’s latest filing asserts the concept that the Commission should not be allowed to “accord itself power to dictate the conditions under which digital assets may be commercialized, their evaluation and the parameters under which market participants may transact.” It further alleges that “SEC has failed to present any facts that support that XRP is a security and improperly retroactively applied the federal securities law in bringing its enforcement action.
4. Ripple Seeks Resolution in Long-Standing Legal Dispute With SEC
Ripple up against the SEC
Ripple Labs Inc., the blockchain payments company behind the cryptocurrency XRP, is again appealing their long-standing legal dispute with the US Securities and Exchange Commission (SEC). The main question is whether XRP should be classified as a security, or an unregistered security, and the outcome of the lawsuit could have implications for the entire crypto space.
Earlier this year, the SEC filed charges against Ripple, alleging that the company had sold over $1.3 billion worth of XRP securities without filing a registration statement with the Commission. In response, Ripple announced that they would be fighting back with the support of the XRP community.
The company believes that the lawsuit is ultimately a “debate about the appropriate classification of virtual assets” and any resolution will require a “thorough analysis of the facts and law.” Ripple and its legal team remain confident that the Commission will eventually recognize that XRP is a currency and not a security.
In the meantime, Ripple is seeking to engage the SEC in finding a resolution outside of litigation. Ripple’s CEO, Brad Garlinghouse, has also expressed hope that a “constructive dialogue” can be established to bridge the gap between the two parties.
The clock is ticking as the SEC’s lawsuit continues to move along in court. Ripple’s new filing has offered further clarity on its approach to the case, ensuring both the company and the SEC have their points heard as the case unfolds. It seems Ripple remains adamant in its belief that XRP is not an unregistered security, and remains optimistic that their stance will prevail in court. With the SEC’s appeal process in full swing, it’s likely we will have more clarity on the matter sometime soon.