- In the case, a court dismissed the agency’s objections to block the acquisition of Voyager Digital by Binance.US.
- The matter also touched on whether cryptos are securities of commodities.
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Ripple Labs has asked the federal court to rule the case against the blockchain and its founders – brought by the SEC for allegedly selling unregistered securities – in its favor, referencing a similar legal matter where a bankruptcy judge dismissed identical views by the commission.
On March 20, the company and its current and former executives, Bradley Garlinghouse and Christian Larsen, filed a notice of supplemental authority before the US District Court Southern District of New York to strengthen its notice of fair defense. In the filing, the defendants cited a most recent case where the New York bankruptcy court rejected the SEC’s motion to block the acquisition of Voyager Digital by Binance. US.
In the objection, the commission said that VGX, a digital token owned by the bankrupt crypto lender, has ‘some aspects’ of a security without further details. In addition, the SEC noted that Binance.US was in itself an unregistered security platform, also with no specifics.
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The arguments – something Ripple and industry experts think could tilt the case in favor of the payments-focussed blockchain – were strongly rejected by the presiding judge, Michael Wiles.
“I get the feeling that this objection has been made as a kind of a cover, so you can say later that we will see we raised these issues,’ Wiles told the attorney representing the SEC, William Uptegrove, describing the objections as shocking. “You come here and tell me that I should stop everyone in their tracks because you might have an issue. It is kind of a weird objection.”
‘No clear guidance’ by the regulators
Besides, Judge Wiles’ ruling, according to the defendants, is following the argument by Ripple that SEC did not provide it with clear guidance on whether XRP was a security or not and cannot be held responsible for any wrongdoing.
“Regulators themselves cannot seem to agree as to whether cryptocurrencies are commodities that may be subject to regulation by the CFTC, or whether they are securities that are subject to securities, or neither, or even on what criteria should be applied in making the decision,” a passage from the ruling read.
Meanwhile, Attorney and Ripple supporter John Deaton recently opined that ‘Hinman emails’, the most controversial aspect of the case, could be opened to the public soon. The presiding judge, Analisa Torres, ruled that the documents, for which the SEC filed a motion in December to have some of its content hidden, be opened. Although industry pundits believe the summary judgment could come sooner, the definite date remains unknown.
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