Ripple: Supreme Court Supports Law Adaptation in SEC Case
Legal experts speculate about the outcome as the high-stakes legal battle between Ripple and the Securities and Exchange Commission (SEC) approaches summary judgment.
Valuable insights can be gathered from similar ongoing legal disputes.
Stuart Alderoty, Ripple’s chief legal officer, recently shared a significant development. He highlighted a Supreme Court opinion emphasizing the need to adapt legal factors to the evolving digital landscape. Ripple argues that the Howey test and its statute should be interpreted within the common law framework.
This is consistent with Ripple’s argument that Howey (and its operative statute) carries the “soil” of common law in which an “investment contract” requires a contract for an investment that creates post-sale rights for the purchaser and obligations on the seller. 2/2
— Stuart Alderoty (@s_alderoty) May 19, 2023
Ripple perceives the Supreme Court’s acknowledgment as a powerful affirmation supporting its position. At the heart of Ripple’s argument is the proposition that an “investment contract” requires a contractual agreement granting post-sale rights and corresponding obligations.
Alderoty criticized the SEC’s position on the “common enterprise” argument, pointing to the regulator’s past mistakes. The Supreme Court’s recognition of adapting legal factors to the modern world could have far-reaching consequences for Ripple and the cryptocurrency industry.
Another point of contention is the unsealing of the Hinman documents, which reveal how the SEC initially categorized cryptocurrencies like Bitcoin and Ethereum as securities. Ripple achieved a victory as the request to seal the documents was denied. The documents are set to be unsealed on June 6.
In a recent development, both parties requested a one-week extension to submit their cross-motions for summary judgment and the accompanying exhibits. The new deadline is June 13, 2023.
Since December 2020, Ripple has been in a legal battle with the SEC, accused of conducting an unregistered securities offering worth $1.3 billion through the sale of XRP tokens.