Former SEC official predicts that the SEC will lose its lawsuit against Ripple. The US Securities and Exchange Commission, according to a former executive, stands a decent chance of losing its $1.3 billion lawsuits against Ripple “on the merits” of the case.
Attorney Joseph Hall has expressed concerns about the SEC’s goal in the high-stakes case against Ripple, which will have far-reaching implications for the whole sector.
The lawsuit claims that the business and its co-founders, Brad Garlinghouse and Christian Larsen, failed to inform the Securities and Exchange Commission (SEC) about the sale of XRP tokens beginning in 2013 and that the tokens are unregistered securities. The SEC has been attempting to establish that securities fraud occurred as a result of this.
On Tuesday, Hall, a former managing executive for policy at the Securities and Exchange Commission, appeared on the Thinking Crypto podcast with host Tony Edward and said: “I’m not entirely sure what the SEC is planning on proving in the XRP litigation.”
The stakes for the SEC and the crypto industry as a whole are quite high. “The SEC has a lot riding on this lawsuit,” Hall says, and “their entire regulation project may be effectively shut down if they lose on the merits.”
He continued:
“And I continue to think there is a pretty good chance that [the SEC] will lose on the merits.”
Uhhmm… In the LBRY case, LBRY actually asserted a Fair Notice Defense and not only did it not get stricken, the SEC didn’t even TRY and strike it.
So, how a trial level court striking a completely different affirmative defense in that case is relevant… I don’t understand. https://t.co/g9XuBWr4Ob pic.twitter.com/X0OSRecUdB
— Jeremy Hogan (@attorneyjeremy1) February 22, 2022
Another attorney, Jeremy Hogan, who has been watching and commenting on the Ripple case for some time, feels Ripple’s fair notice defense will be sufficient to keep it out of the fire. He highlighted a precedent from the SECn’s case against Library Credits (LBRY) in March, which was thrown out because the SEC failed to provide reasonable notice.
Once a decision is reached in the Ripple case, it may set the tone for investigations and litigation in cryptocurrency issues for the foreseeable future. If the SEC prevails, it may launch a slew of fresh investigations and legal lawsuits targeting cryptocurrency projects. If Ripple prevails, the SEC may be forced to scale back its efforts to regulate the cryptocurrency business.
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