Ripple seems to be surfing on the SEC high tide. Just three days ago the Blockchain Association, a cryptocurrency advocacy organization based in Washington, D.C., submitted a late-Friday request for authorization to support Ripple in its ongoing legal dispute with the Securities and Exchange Commission (SEC) as a friend of the court.
The SEC sued Ripple at the end of 2020 because it had sold XRP as an unregistered security. Following a series of procedural procedures, the parties recently filed their applications for summary judgment. The court hearing the case on Friday received requests from the Blockchain Association for authorization to join the action as well as the actual amicus brief.
The motion for leave stated,
“The SEC’s extremely broad interpretation of the securities laws would have devastating effects on the industry (and even outside the industry).”
Coinbase, Ripple’s Strongest Ally So Far
Coinbase, a cryptocurrency exchange, has asked a federal court for permission to intervene as a friend of the court (amicus) in the continuing dispute between Ripple Labs and the Securities and Exchange Commission of the United States (SEC).
Coinbase joins the Blockchain Association, a lobbying organization for the sector, SpendTheBits, a cryptocurrency payments app that accepts XRP, and attorney John Deaton in an effort to support Ripple’s legal defense against the SEC, which filed suit against the company at the end of 2020 over claims it sold XRP as an unregistered security.
The discussion focused on whether the SEC gave “fair notice” before commencing its enforcement action, making fun of the industry complaint that the regulator did not give businesses clear instructions during the procedure.
The filing stated,
“Given the absence of SEC rulemaking for the cryptocurrency industry, the question of whether the SEC has given fair notice before bringing an enforcement action against sales of one of the thousands of unique digital assets will often be highly fact-intensive, which makes it particularly ill-suited for adjudication on summary judgment.”
In a similar vein, Coinbase said that the SEC’s inconsistent enforcement strategy has caused “uncertainty” for companies operating in the industry.
This defense and the stance that the regulator hasn’t undertaken any rulemaking that would “give the regulatory clarity” businesses desire to take up a large portion of the petition.
In addition, the submission attacked the claim that cryptocurrencies might be handled as conventional securities, claiming that the majority of cryptocurrencies do not represent ownership stakes or pay dividends in the same manner that shares might.