The Securities and Exchange Commission (SEC) has actually confessed that prior to prompting legal procedures against Ripple, it never ever informed asking 3rd parties that it thinks about XRP a security.
“…… the Commission confesses that before the filing of this case particular 3rd parties inquired about the legal status of XRP. However, the Commission did not state a view one way or the other in reaction.”
The remark came out in a “ask for admissions to the SEC” document attached to the current court filing. What’s more, this piece of proof now forms a main admission in the case.
However why is that important?
How Does This Help Ripple?
The continuous SEC vs. Ripple lawsuit is currently still in the discovery stage. Because December 2020, both sides have actually sparred, on several movements, with the intent of verifying their respective claims.
On balance, Ripple has certainly come out on top. For example, in engaging the SEC to answer if Ethereum is a security just recently. This point strengthens Ripple’s case no matter how the SEC responses.
“If the answer is “no,” then it unlocks for Ripple to compare XRP to Ether. And as we understand, only Ethereum had an ICO …
“Yes,” is not a politically fathomable answer for the SEC.”
A considerable aspect of the defense boils down to “fair notification.” This asserts that Ripple was under the assumption that XRP, Bitcoin, and Ether were equivalents in the eyes of the SEC.
And, as previous SEC Director William Hinman greenlit both Ether and Bitcoin, Ripple assumed the very same for XRP. It follows that without fair notification otherwise, the firm was uninformed of breaching suitable securities law.
Relating to the latest bombshell admission by the SEC, by specifying they declined to clarify XRP’s legal status before lawsuits, they have actually successfully played into the reasonable notice defense by conceding no fair notification was given.
Nevertheless, that alone is not a cut and shut case as Ripple will still need to demonstrate XRP wasn’t offered in a manner constant with a securities offering.
The SEC Demonstrates “Regulation Via Litigation” With Coinbase
Wednesday saw Coinbase CEO Brian Armstrong tweet about his dealings with the SEC over his platform’s Lend program.
Armstrong said the Commission considered the program a security and threatened to take legal action against if they proceed with launching the new feature. What’s even worse, Armstrong stated the firm refused to discuss how they came to that determination.
Billionaire financier Mark Cuban panned the SEC action by identified it “Regulation via Litigation.” He encouraged Armstrong to “go on the offensive.”
In an amusing take on this, Ripple CEO Brad Garlinghouse responded to Armstrong by tweeting a meme from the Die Hard film captioned with “welcome to the party, friend.”