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- Ripple challenges the SEC’s shaky reliance on Aqua-Sonic, exposing inconsistencies in the agency’s arguments.
- Thousands of XRP investor affidavits weaken the SEC’s claims, highlighting a lack of evidence for reliance on Ripple’s promotions.
- Ripple aims to expose SEC’s selective enforcement, pushing for fairer crypto regulations under new leadership.
The U.S. Securities and Exchange Commission (SEC) has filed its opening brief in the Ripple appeal, sparking intense debate. The SEC’s strategy focuses on proving promotional statements by Ripple rather than demonstrating investor reliance on those statements. This shift in approach raises legal questions about the framework applied to securities laws in the crypto industry.
SEC’s Argument Faces Scrutiny
Attorney Jeremy Hogan highlighted flaws in the SEC’s arguments, particularly its reliance on precedents like Aqua-Sonic. The SEC combined unrelated sentences from the case to support its position. Hogan criticized this approach, stating it misrepresents the case’s conclusions. Ripple’s legal team is expected to dismantle these claims, emphasizing key differences between Aqua-Sonic and the Ripple case.
This SEC brief was hard to work thru because, IMO, the case won't be ruled on. But I've come this far so, dangit, here we go! My thoughts on the initial Ripple v. SEC appeal brief…
— Jeremy Hogan (@attorneyjeremy1) January 16, 2025
We aren't holding back tonight. 🙂 https://t.co/l8Tcqdfuxc pic.twitter.com/bIWnJC1y3N
Additionally, the SEC’s failure to address thousands of affidavits from XRP investors, compiled by attorney John Deaton, is a glaring omission. These affidavits refute the claim that XRP buyers relied on Ripple’s promotional efforts. The SEC’s inability to counter this evidence could undermine its appeal.
Ripple’s Confident Counterattack
Ripple’s Chief Legal Officer, Stuart Alderoty, expressed confidence in the company’s legal position. He emphasized the selective enforcement of securities laws under SEC Chair Gary Gensler. Alderoty criticized the agency’s tactics, asserting they aim to suppress the crypto industry rather than enforce laws faithfully.
Moreover, Ripple plans to spotlight the agency’s inconsistent litigation strategies, which appear driven by desired outcomes rather than legal principles. Ripple believes exposing these tactics will strengthen its case and catalyze reforms within the SEC under new leadership.
As expected, the SEC’s appeal brief is a rehash of already failed arguments –and likely to be abandoned by the next administration. We’ll respond formally in due time. For now, know this: the SEC’s lawsuit is just noise. A new era of pro-innovation regulation is coming, and… https://t.co/3ZxO64Fs8C
— Stuart Alderoty (@s_alderoty) January 16, 2025
Broader Industry Implications
This case carries far-reaching consequences for the cryptocurrency sector. Vivek Ramaswamy criticized the SEC’s legal overreach, asserting that its tactics often violate constitutional principles. The Ripple case exemplifies the growing tension between regulatory agencies and the rapidly evolving crypto industry.
The outcome of this appeal will shape how securities laws apply to digital assets. Ripple’s confidence, paired with the SEC’s questionable arguments, suggests the crypto company is poised to emerge stronger.