- Judge Analisa Torres to Allow Ripple to Use Its “Fair Notice” Defense in SEC’s Ongoing Litigation
- Ripple’s “fair notice” defense hinges on the fact that the trading platform received SEC guidance on whether XRPs are securities prior to listing the digital asset
- The SEC did not provide guidance on this and is attempting to dismiss the defense in the ongoing case
The SEC's (Securities and Exchange Commission) ongoing lawsuit against Ripple made huge strides in favor of the defendants, as Judge Analisa Torres allowed the cross-border payments company to use its "fair notice" defense with respect to XRP.
U.S. District Judge Annalisa Torres of the U.S. District Court for the Southern District of New York denied the SEC's motion to strike the "fair notice" defense from the court proceedings.
According to Judge Torres' order, "the SEC has not met its burden of proving that Ripple's fair notice defense should be struck at this time."
Ripple's "fair notice" defense states that prior to the listing of XRP on a digital asset exchange, representatives of the platform sought clarification from the SEC as to whether the digital asset was a security.
Representatives of the trading platform met with the SEC in 2019 to discuss the issue, according to Ripple. However, the SEC did not specify whether the digital asset was a security. The platform then went on to shelve XRP.
In addition, Judge Torres' order went on to state that "prior to the SEC's filing, XRP was listed on over 200 exchanges, billions of dollars of XRP were traded each month, numerous market makers were involved in XRP trading on a daily basis, Ripple's ODL products were used by many customers, and XRP was used in third-party products, many of which were developed independently of Ripple.
In a recent Soprano threads Stuart Alderoty, Ripple's general counsel, sees Judge Torres' order as a victory for the company. He said.
Today’s order makes clear that there is a serious question as to whether the SEC ever provided Ripple with fair notice that it would be prohibited from distributing XRP under the securities laws since 2013.It’s good to see the judge reject the SEC’s attempt to prevent Ripple from mounting a fair notice defense. All the more reason to bring the curtain down on the SEC’s “regulatory enforcement” approach.
Similarly, Brad Garlinghouse, CEO of Ripple. Reviews The order was a "huge victory for Ripple," who would have preferred the lawsuit to end with Judge Torres' review of the fair notice defense.
Mr. Garlinghouse went on to say that "the SEC must now prove its claims. He also expressed confidence that all charges against Ripple, himself and Chris Larsen would ultimately be dismissed.