It has been acknowledged by the SEC (Securities-and-Exchange-Commission) that before commencing with legal proceedings to confront Ripple, it by no means updated the other interested entities that it regards XRP as a security. The statement was noted in a document entitled “request-for-admissions-to-the-SEC,” which was linked with the new court filing. Additionally, this is now considered a piece of evidence and is incorporated in the lawsuit.
Ripple’s journey through the lawsuit
The current lawsuit between Ripple and SEC is in its discovery phase. Since 2020’s December, both the parties have argued, on various motions, targeting to verify their corresponding claims. Gradually, Ripple has moved to the top. For instance, recently, it compelled the SEC to respond about the status of Ethereum as whether it is a security or not. This argument builds up the position of Ripple in the case irrespective of the answers given by the SEC.
A noteworthy among the defense’ factors point toward a “fair notice” asserting that Ripple was considering Bitcoin, XRP, and Ether to be equivalents in the SEC’s consideration. William Hinman, being a former director of SEC, reinforced that Ripple assumed both of the abovementioned assets to be similar to XRP, which means that the company was not in knowledge of the breach of the securities law. Thus, it was not fair notice that the regulator issued against it.
Concerning the recent surprise admission submitted by the securities department through which it denied clarifying the legal status of XRP before the litigation. The SEC has played well by admitting that it has not issued any fair notice for Ripple. Nonetheless, this does not conclude the lawsuit as the defenders have to explain that XRP was not traded as an offering of securities.
SEC’s “regulation-via-litigation” with Coinbase
On Wednesday, Brian Armstrong (the CEO of Coinbase) tweeted, stating his communications with the SEC for the platform’s Lend project. He elaborated that the program was regarded as a security by the regulator, and it threatened to prosecute the firm if it moved ahead with launching the project. Moreover, according to Armstrong, the agency denied elucidating the reason for determining so. Mark Cuban, a Billionaire investor, criticized the response of the SEC by categorizing it as “regulation-via-litigation.” He pushed Armstrong to attack the adversary. During a humorous talk about this, Brad Garlinghouse (the CEO of Ripple) responded to Armstrong with a meme extracted from the movie “Die Hard,” with a caption stating Welcome-to-the-Party,-Pal.