Ripple Cites Binance Ruling To Strengthen Defense Against SEC Penalties

Recently, Ripple Labs Notice of Supplementary Rights “It points to the impact of the recent Binance decision,” which was filed in response to Ripple’s opposition to the SEC’s pending motion for relief and entry of final judgment. The crux of Ripple’s argument is that the U.S.

The report specifically pointed to the District of Columbia District Court’s June 28 memorandum opinion and order in SEC v. Binance Holdings, which reflects the court’s complex ruling on the SEC’s claims of unregistered securities sales and contains important insights relevant to the case.

The court’s decision in the Binance case, which partially granted and partially denied the SEC’s motion to dismiss, specifically addressed sales of certain digital assets. Importantly, the court referenced the Howey test, which is traditionally used to determine what constitutes a security, and noted that intangible digital assets do not fit neatly into that framework.

Impact of Ripple’s lawsuit

The opinion supports Ripple’s position that the legal ambiguity of digital assets requires clearer regulatory guidelines. The court also criticized the SEC’s approach to regulating a multi-billion dollar industry through piecemeal litigation, highlighting its inefficiencies and potential for inconsistent results.

Ripple cited the ruling to bolster its argument that the severity of the penalties should be reduced due to a previous summary judgment in its case that provided much-needed clarity about the legality of various XRP sales.

Ripple argues that because there was no clear regulation prior to this ruling, any violations by the company did not amount to reckless disregard for the law. The SEC’s complaint against Ripple does not allege recklessness, which the company argues should further influence the court’s decision regarding the appropriate remedy.

Binance’s complaint itself covers a very wide range of digital assets and programs, including Binance’s stablecoin, Binance Coin, and investment programs such as Simple Earn and BNB Vault. The SEC’s lawsuit against Binance, which was launched on June 6, 2023, accuses the exchange of soliciting U.S. investors to trade cryptocurrency securities on its unregistered platform and alleges 13 violations of the federal securities laws.

Ripple’s filing responds to industry-wide calls for a more transparent regulatory framework that avoids the pitfalls of litigation-driven oversight. By echoing the court’s ruling in the Binance case, Ripple seeks to temper the SEC’s push for harsh penalties and appeal for a structured approach to regulating cryptocurrencies.

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