Blockchain Association Requests to File Amicus Brief in Support of Ripple Against the SEC.
The Blockchain Association has indicated an interest in filing an amicus curiae brief supporting Ripple’s lawsuit against the Securities and Exchange Commission (SEC).
“Today we announced we filed an amicus brief supporting a correct interpretation of Howey in the SEC’s two-year legal battle against @Ripple,” the Blockchain Association said in a statement.
1/ Today we announced we filed an amicus brief supporting a correct interpretation of Howey in the SEC’s two-year legal battle against @Ripple.
A judge now has the opportunity to issue a substantive opinion on how Howey applies to digital assets.
Here's what's at stake???
— Blockchain Association (@BlockchainAssn) October 28, 2022
The Association States Its Position in the Suit
In a motion submitted yesterday, the association noted that it is interested in the lawsuit because an “overly court ruling” could negatively impact the entire blockchain industry in unintended ways.
According to the association, the SEC’s statements throughout its litigation against Ripple prove that the agency sees U.S. laws beyond the initial investment contract application, between a crypto token issuer and investors.
The association added that the SEC’s “extremely broad interpretations” of the U.S. securities laws could negatively impact the country’s cryptocurrency industry.
“Market participants acquire tokens in many different ways, and use them for different purposes. Many of those methods or uses have nothing to do with primary sales or distributions of tokens,” the association’s motion read.
It also provided several examples to demonstrate how market participants use cryptocurrencies outside the SEC’s interpretation of investment contracts.
“Applying the securities laws to those tokens–whether or not through the prism of the touchstone Howey test–would significantly restrict those networks from functioning,” the motion read.
Blockchain Association further said that SEC is forcing regulations rather than getting other sides’ opinions. Blockchain Association said, “No regulatory agency should unilaterally regulate crypto with outdated standards.”
“Since 2019, the SEC has regulated how U.S. securities laws apply to digital assets through enforcement actions rather than guidance or rulemaking.
Often, SEC enforcement actions end in one-sided settlement agreements rather than judicial opinions that factor in the unique facts presented to the court by both sides.
Rather than settle, Ripple is fighting back through our judicial system. What this means is that a judge will soon rule on the issue.
Should the court adopt the SEC’s version of the law, the landscape of assets falling under the SEC’s jurisdiction will expand beyond how the Supreme Court intended in Howey.
Today, we joined the fight with an amicus brief to support our growing crypto ecosystem. No regulatory agency should unilaterally regulate crypto with outdated standards. Instead, it’s time for Congress to define a clear regulatory framework to guide the industry.”
Blockchain Association Exec Says SEC Is Wrong
The SEC claims Ripple violated U.S. securities laws via its 2013 Initial Coin Offering (ICO). However, Ripple has maintained that XRP is not a security, adding that the SEC lacks the legal theory to back its claim.
Jake Chervinsky, Head of Policy at Blockchain Association, said the SEC is legally wrong to sue Ripple. According to Chervinsky, the SEC has bluntly refused to provide guidance on what crypto assets should be termed an investment contract. Instead, SEC Chair Gary Gensler recently stated that the majority of cryptos are securities without providing further explanation.
Chervinsky said Gensler’s statement only portrays his personal views and cannot be seen as law.
“Yet again, the SEC has expressed its views on crypto to a federal court in a motion for summary judgment, rather than to the American people in guidance or rulemaking. The SEC’s views are wrong as a matter of law and policy,” he added.
Ripple Keeps Getting Support
The Blockchain Association is the latest organization to declare support for Ripple in the SEC lawsuit officially. U.S. District Judge Analisa Torres has continued to approve third parties’ requests to file amicus briefs supporting Ripple. Meanwhile, it is expected that the SEC will state its opinion on whether the association should be permitted to file its amicus curiae brief.
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