The Securities and Exchange Commission (SEC), according to a former official, stands a decent chance of losing its $1.3 billion lawsuit against Ripple “on the merits.”
Attorney Joseph Hall also expressed concerns about the SEC’s objective in the high-stakes case against Ripple (XRP), which will have far-reaching consequences for the whole industry.
The lawsuit claims that the business and its co-founders, Brad Garlinghouse and Christian Larsen, failed to inform the Securities and Exchange Commission about the sale of XRP tokens beginning in 2013, and that the tokens are unregistered securities. The SEC is attempting to establish that securities fraud occurred as a result.
On February 22, Hall, a former Managing Executive for Policy at the Securities and Exchange Commission, appeared on the Thinking Crypto podcast with host Tony Edward.
The stakes for the SEC and the crypto industry as a whole are quite high. “The SEC has a lot riding on this lawsuit,” Hall says, and “their entire regulation project may be effectively shut down if they lose on the merits.”
Ripple, Hall believes, has a solid case based on the SEC’s failure to provide fair notice of its inquiry. Individuals and corporations must be notified that they are being investigated by the SEC.
Jeremy Hogan, another attorney who has been watching and commenting on the Ripple issue for some time. Then, feels that Ripple’s fair notice defense will be sufficient to keep it out of the fire. He highlighted a precedent from the SEC’s case against Library Credits (LBRY) in March. Of course, which was thrown out due to the SEC’s failure to provide fair notice.
Once a decision is reached in the Ripple case, it may set the tone for investigations. Then, and litigation in cryptocurrency issues for the foreseeable future. If the SEC prevails, it may launch a slew of fresh investigations and legal lawsuits targeting cryptocurrency projects. Lastly, If Ripple wins, the SEC may be forced to substantially reduce its attempts.
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