The US Securities and Exchange Commission (SEC) has filed its response to Ripple Labs’ letters regarding supplemental authority in the Bittner and Voyager cases. As Bitcoinist reported, the Voyager judge found strong words for the unclear regulatory situation of the US crypto industry.
Ripple filed the decision as a supporting argument for its fair notice defense, pointing to bankruptcy judge Michael Wiles’ writing of “long-standing uncertainties” for the industry that even regulators disagree on.
Ripple’s early March brief of supplemental authority regarding the Bittner case cites the Supreme Court’s February 28 ruling in Bittner v. United States. In it, the Supreme Court reiterated that “fair notice should be given to the world in language understood by the general public,” which the SEC clearly did not do with XRP.
SEC’s Powerless Arguments Against Ripple
In its reply brief yesterday, the SEC asserts that neither decision supports Ripple’s fair notice defense and provides no basis for denying the SEC’s motion for summary judgment. “Indeed, neither decision even involves a fair notice defense,” the SEC said.
In addition, the agency claims it has “consistently provided guidance” that crypto offerings violate securities laws “when they involve the offer and sale of an investment contract.”
“Voyager does not help Defendants either,” states the SEC, which argues that it involved a bankruptcy plan for the potential sale of a crypto asset conglomerate to another company.
“Defendants shamelessly mischaracterize the Voyager bankruptcy court’s statements and pluck choice phrases out of context in a misguided attempt to boost their unavailing fair notice defense,” the SEC continues, claiming that nowhere in his order did Judge Wiles emphasize “limited guidance … for market participants generally”.
In the XRP legal community, the statements are being challenged and a strong impact on the case is being denied. Attorney Jeremy Hogan writes:
Although it raises valid points re the Bittner case, it’s attempt to argue that the Voyager judge did not say that the crypto space faces glaring uncertainty is … smirkable. 🙂
I think these are two cases that are bad for the SEC and this reply negates the Bittner decision a little but doesn’t take away much bite from the Voyage judge’s ruling. But it’s all FND stuff.
Attorney John E. Deaton responded to Hogan’s assessment, adding, “Not that XRP holders want to go to the Supreme Court, but let’s not forget the language favorable to Ripple’s fair notice defense in Bittner came from Justice Gorsuch who used to work under Micheal Kellog at Kellog’s firm, who orchestrated Ripple’s fair notice defense and brief.”
Meanwhile, Australian attorney Bill Morgan noted that the SEC’s response letter ends speculation about why the SEC did not respond to Ripple’s letter on the Bittner case. “Sorry guys, no settlement yet,” Morgan wrote.
At press time, XRP was trading at $0.4362 after breaking a sideways trend that persisted since the beginning of November 2022.
Featured image from Fox Business, chart from TradingView.com