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The U.S. SEC responds to the notice of supplemental authority from Ripple regarding the Binance decision, which the company argues supports its remedies-related opposition brief.
According to the filing shared by famous defense lawyer James K. Filan, the SEC contended that the Binance decision is irrelevant to the pending remedies motion.
SEC’s Position
The securities regulator argued that Ripple attempted to use a single observation in the nearly 90 pages of the Binance ruling to argue against ‘harsh penalties.’ Notably, the SEC stated that Ripple’s attempt to leverage the Binance decision to ‘extrapolate’ its litigation strategies is unwarranted.
Additionally, the agency stated that the Binance decision did not address Ripple’s conduct or penalty for its securities law violation. Furthermore, it contended that Ripple omitted a relevant portion of the Binance decision that could significantly impact the remedies decision.
Specifically, the SEC emphasized that the court rejected Binance’s argument regarding the fair notice doctrine and found that the defendants are fully aware of potential regulatory risks.
“The Binance court also found that, while the fair notice defense is an objective inquiry, it was ‘notable’ that the defendants were alleged to have actual notice that the SEC could pursue them, […] just like Ripple here had specific notice about the risks of its actions, based on the advice of counsel […] and chose to proceed anyway,” the regulatory agency argued in an excerpt of the filing.
Consequently, the SEC asserts that Ripple’s attempt to leverage the Binance decision to argue against harsh penalties is ‘wholly irrelevant.’
XRP Community Reacts
Meanwhile, the SEC’s response to Ripple’s recently filed supplemental authority elicited reactions among XRP enthusiasts.
Prominent community figure Ashley Prosper questioned the SEC’s rationale for dedicating a full paragraph to the fair notice doctrine when Ripple did not mention it in its notice.
Prosper claimed that Ripple had no fair notice since it was the first victim of the SEC lawsuit. He also slammed the SEC for its recent legal setbacks since Judge Torres issued the Ripple summary judgment.
The industry commentator urged Judge Analisa Torres to consider Ripple’s supplemental authority and bolster her ruling against any potential appeal from the SEC.
#XRP #XRPCommunity
Is the SEC worried about the Fair Notice Defense? Ripple didn't mention it in their letter of supplemental authority, so why did they need to dedicate a whole paragraph to it?🤔
Ripple was the first to be sued, so unlike the others, it really did not have fair… https://t.co/A8c1GMBmif— Ashley PROSPER (@AshleyPROSPER1) July 3, 2024
Ripple’s Supplemental Authority
The SEC’s filing comes a day after Ripple submitted its supplemental authority around the Binance decision. As reported earlier, Ripple said the Binance judge followed Judge Analisa Torres’ reasoning to declare that secondary market sales of BNB do not constitute investment contracts.
The company also claimed that the Binance judge criticized the SEC’s regulation strategy, contending that the judge’s recognition of the lack of clarity in the industry supports its position against harsh penalties. In the meantime, the parties are awaiting the court’s final judgment.