On March 3, a new update regarding the Ripple and SEC case surfaced on Twitter, where attorney Jeremy Hogan stated that the common people need to know what the laws are before they can be sued. In the letter, James Filan, the attorney in charge of the case, stated that Ripple filed a strong lawsuit in line with the recent Supreme Court case that backed the blockchain firm’s “fair notice” defense.
https://twitter.com/attorneyjeremy1/status/1631767444980215809?s=20
In 2020, the U.S. Securities and Exchange Commission filed a lawsuit against Ripple, claiming that the company sold XRP illegally because it was not registered as a security. This assertion was disputed by Ripple, which insisted that because the token is used for cross-border transactions between banks and some other financial institutions, it shouldn’t be viewed as an investment contract.
The recent letter is about the U.S. government’s stance to penalize American taxpayers who have failed to disclose their foreign bank accounts. This has prompted Ripple to reiterate how important it is that federal laws state what is prohibited in clear terms. This is backed up by the rule of lenity which states that “a fair warning should be given to the world in language that the common world will understand of what the law intends to do if a certain line is passed.” This has posed a serious fair-notice problem for Ripple.
The Bank Secrecy Act has no record of per-account penalties for non-willful violations. The letter also noted that many seasoned tax professionals and return preparers were not aware of the FBAR reporting requirements prior to 2008 and 2009 when the government began aggressive enforcement of the FBAR penalties, let alone the government’s current theory regarding the scope for non-willful violations. According to them, if many experienced accountants could not anticipate the government’s current theory, how would the common world have had fair notice of it?
Ripple is of the opinion that the ruling supports its argument that the SEC’s inability to provide fair warning concerning XRP’s legal status has affected investors and the crypto industry as a whole negatively.
However, The SEC is currently facing criticism for their manner of approach in regulating the crypto space, especially since the agency keeps bringing in new lawsuits against other industry players. The crypto community, on the other hand, is eagerly awaiting the date for the summary judgment. Currently, there are speculations that the case might be resolved by the end of March. For now, a lot of Ripple supporters believe that the judge will most likely rule in Ripple’s favor, but until then, all fingers remain crossed.
