The long-running legal battle between Ripple and the Securities Exchange Commission (SEC) is heating up. Ripple is now asking the court to consider remarks made by Hester Peirce that the SEC hadn’t done enough to regulate cryptos. The SEC has hit back by saying that a commissioner’s statement did not give a company grounds to flout securities laws.
Ripple are hoping to bolster their defence by using statements made by two SEC commissioners to the tune that Ripple was not given enough clarity around how securities laws applied to digital assets.
Ripple has therefore filed a new motion with judge Analisa Torres of the Southern District of New York asking the court to take into account statements made by Hester Peirce, and Elad Roisman, who are two of the current five SEC commissioners.
Peirce, otherwise known as Crypto Mom for her favourable attitude to cryptocurrencies in general, recently made the statement along the lines that there is not enough clarity from the SEC on how crypto companies should operate. Ripple is using this to bolster its “lack of fair notice” defence.
In its latest filing, Ripple’s legal team have claimed that two of the SEC commissioners have:
“candidly explained that there’s a decided lack of clarity for market participants around the application of securities laws to digital assets and their trading.”
In addition, the legal team have drawn on remarks by the two SEC commissioners that the Howey test is not perfectly clear when applied to cryptocurrencies.
The SEC is hoping to overturn this latest move by Ripple, and has stated that the remarks made by Commissioners Pierce and Roisman were not statements made by the SEC itself, and so should have no authority with the court.
“Essentially, Defendants’ arguments are tantamount to arguing that they cannot be found liable for violating a statute on the grounds of certain public statements by legislators who disagree with the statute.”
The regulator stated that a remark made by a commissioner could not repeal section 5 of the securities act. It added that it had been warning crypto issuers that they were obliged to comply with the federal securities laws.
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