The U.S. Securities and Exchange Commission (SEC) has responded to Ripple’s notice of supplemental authority concerning the Binance decision, which Ripple argues supports its opposition to remedies related to the case.
According to information shared by prominent defense attorney James K. Filan, the SEC maintains that the Binance decision holds no relevance to the current motion on remedies.
In its argument, the SEC contends that Ripple has attempted to base its opposition to severe penalties on a single observation from the extensive 90-page Binance ruling. The SEC emphasized that Ripple’s attempt to extrapolate its litigation strategy from this decision is unjustified.
Furthermore, the SEC pointed out that the Binance decision does not address Ripple’s specific conduct or the penalties for its violation of securities laws. The SEC also criticized Ripple for omitting a critical part of the Binance ruling that could significantly impact the decision on remedies.
Specifically, the SEC highlighted that the court in the Binance case rejected arguments related to the fair notice doctrine and affirmed that the defendants were fully aware of potential regulatory risks.
Quoting from its filing, the SEC argued, “The Binance court also noted that, while the fair notice defense is an objective inquiry, it was significant that the defendants were alleged to have actual notice that the SEC could pursue them, much like Ripple, which was specifically warned about the risks of its actions, based on counsel’s advice, and chose to proceed nonetheless.”
Consequently, the SEC asserts that Ripple’s attempt to use the Binance decision to argue against severe penalties is entirely irrelevant.
Meanwhile, the SEC’s response to Ripple’s recently filed supplemental authority has sparked reactions among XRP enthusiasts. Community figure Ashley Prosper questioned the SEC’s decision to dedicate a full paragraph to the fair notice doctrine, noting that Ripple did not mention it in its notice.
Prosper argued that Ripple had no prior notice since it was the first target of the SEC’s lawsuit. He also criticized the SEC for its recent legal setbacks following Judge Analisa Torres’ summary judgment in favor of Ripple.
Prosper urged Judge Torres to consider Ripple’s supplemental authority and strengthen her ruling against any potential appeals from the SEC.
The SEC’s filing comes shortly after Ripple submitted its supplemental authority referencing the Binance decision. Ripple claimed that the Binance judge’s reasoning echoed Judge Analisa Torres’ findings that secondary market sales of BNB tokens do not constitute investment contracts.
Ripple also asserted that the Binance judge criticized the SEC’s regulatory approach, suggesting that the lack of clarity in the industry supports Ripple’s stance against severe penalties. Both parties now await the court’s final judgment.
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