In the ongoing lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), a recent summary judgment has raised questions about the status of Ripple’s fair notice defense and the impact on XRP’s on-demand liquidity sales. While the judgment has set a bullish momentum for the crypto industry, the specifics regarding the fair notice defense rejection remain somewhat ambiguous.
Stuart Alderoty, Chief Legal Officer at Ripple, referred to footnote number 20 from the summary judgment, which indicates that the court acknowledges the potential validity of Ripple’s fair notice defense against the SEC’s theories. The footnote clarifies that only the Institutional Sales constituted the offer and sale of investment contracts, while the court does not address the defendants’ fair notice defense in relation to other transactions and schemes.
Contradicting Claims: XRP Lawyer’s Perspective
On the other hand, pro-XRP lawyer John Deaton has contradicted claims that the judge outright rejected the fair notice defense. According to Deaton, the judge’s ruling specifically rejected the application of the defense to institutional sales, but it remains open for other transactions. Judge Torres, in her comments, acknowledged that the SEC had provided fair notice in previous enforcement actions related to institutional sales but raised concerns about prosecuting other types of sales, potentially deviating from precedent.
While, the ruling now allows the defendant to present the fair notice defense to a jury, indicating that the battle over this aspect of the case is not yet settled. However, the ultimate implications for the SEC’s case will depend on how other judges interpret and align with this ruling, potentially impacting the SEC’s position moving forward.
Awaiting Clarity in a Crucial Legal Battle
As the XRP lawsuit continues, the crypto community and market participants eagerly await further developments and clarification regarding Ripple’s fair notice defense. The outcome of this legal battle holds significant importance for Ripple, XRP, and the broader regulatory landscape surrounding cryptocurrencies.
