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Ripple filed a Notice of Supplemental Authority, challenging the SEC's regulatory approach.
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Ripple argues SEC's regulation through court cases risks inconsistent results and lacks clarity.
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The SEC is expected to counter Ripple's notice, referencing the Terraform Labs case.
Despite this, Ripple has rejected the SEC’s offer and instead filed a Notice of Supplemental Authority, as shared by Defense Attorney James Filan.
Ripple Filed a Notice of Supplemental Authority
On July 2, 2024, Ripple Labs submitted a Notice of Supplemental Authority in the court of Judge Analisa Torres. This is important because it is related to Ripple’s opposition to the SEC’s motion for remedies and final judgment.
#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
Ripple is using Binance’s recent legal win to challenge the SEC’s approach, arguing that the SEC’s methods lack clear rules and consistency, and need formal rulemaking.
In the notice, Ripple stressed that intangible digital assets do not fit well into the framework set by the Howey test, a seven-page opinion used to decide what is security. Ripple criticized the SEC’s strategy of regulating the industry through court cases, saying this method risks inconsistent results and does not give clear guidance to market players.
Expected SEC’s Response
The SEC is expected to respond to Ripple’s Notice of Supplemental Authority, likely referencing the SEC vs. Terraform Labs ruling. In that case, Judge Rakoff ruled that Terraform Labs and its founder, Do Kwon, broke US securities laws by not registering TerraUSD and Luna as securities.
Judge Rakoff also referenced the Programmatic Sales of XRP ruling, suggesting that Judge Torres might have made a mistake in her ruling.
Impact on XRP Price
The result of this lawsuit is expected to cause significant changes in the price of Ripple’s native token, XRP, and the wider cryptocurrency market. A win for Ripple could trigger an XRP rally, as seen after Ripple’s partial victory last year. On the other hand, a win for the SEC might lead to a drop in the crypto market.
Currently, XRP’s price has seen a small rise of 0.5%, trading at $0.4792 with a market cap of $26.68 billion. This is still below its recent high of $0.52, which was influenced by the news of the potential approval of an Ethereum ETF.