The U.S. Securities and Exchange Commission (SEC) made a surprise attack on the Ripple case by filing a letter of supplemental authority<\/a> to strike Ripple\u2019s \u201cfair notice\u201d defense. Simultaneously, the token XRP is down 2.33% in the last 24 hours to $0.7 following the market\u2019s downtrend.<\/p>\n As the popular SEC vs. Ripple case is expected to be resolved around April this year, the SEC has made a new move that left many wondering if previous expectations could change.<\/p>\n The American regulator is using a winning move from another case to strike at Ripple\u2019s key arguments.<\/p>\n The SEC had taken John M Fife and five entities controlled by him to court in September 2020 for selling $21 billion of penny stocks and gaining a profit of $61 billion without registering as security dealers.<\/p>\n FIFE\u2019s defense adopted an argument similar to Ripple\u2019s, alleging the SEC hadn\u2019t given them a fair warning and the term \u201cdealer\u201d can be widely interpreted. Last month, the court denied this argument.<\/p>\n Naturally, the regulator now aimed to use this denial to strike at Ripple\u2019s \u201cfair notice\u201d key defense.<\/p>\n Similarly, Ripple\u2019s \u201cfair notice\u201d defense alleges the regulator failed to notify them about a possible violation of federal securities laws and claimed the term \u201cinvestment contract\u201d is being misused by the SEC, adding<\/a> that \u201cThe SEC\u2019s theory, that XRP is an investment contract, is wrong on the facts, the law and the equities.\u201d<\/p>\n No foreign regulator has determined that XRP is a security. In fact just the opposite is true. The U.S. would be the unfortunate outlier.<\/p>\n<\/blockquote>\n The SEC is using the FIFE case latest outcome to insist that the term \u201cinvestment contract\u201d is bound by legal parameters since 1946:<\/p>\n In Ripple\u2019s case, binding authority construing the term \u201cinvestment contract\u201d has existed since 1946.\u00a0W.J. Howey Co.<\/em>, 328 U.S. at 298\u201399. Thus,\u00a0Fife<\/em>\u00a0provides additional authority for striking Ripple\u2019s fourth affirmative defense.<\/p>\n<\/blockquote>\n However, the cases have distinct terms. The attorney Jeremy Hogan explained<\/a> via Twitter that the FIFE case outcome \u201c<\/span>marginally helps the SEC\u2019s position in its Motion to Strike Ripple\u2019s Fair Notice Defense so the SEC filed it with the court.\u201d<\/p>\n Although the SEC is trying to make a move out of the similarities from both cases, Hogan claims that FIFE\u2019s \u201cwas in a very different stage of litigation and the standard is completely different than the SEC v. Ripple case.<\/p>\n In the \u201cFife\u201d case, the Defendant tried to argue \u201cFair Notice\u201d in order to dismiss the lawsuit entirely (and failed) because the burden is very high on a party moving to strike a pleading. In the Ripple case, it\u2019s the SEC that is trying to strike the affirmative defense of Fair Notice and it has the high burden to meet.<\/p>\n<\/blockquote>\n \u00a0<\/p>\n Ripple CEO Brad Garlighouse had remained hopeful at the end of 2021 as he expressed<\/a> to CNBC:<\/p>\n Clearly we\u2019re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications.<\/p>\n<\/blockquote>\n Related Reading |\u00a0<\/i><\/b>XRP Builds Momentum With 7% Increase As Ripple Launches New ODL Partnership<\/a><\/em><\/strong><\/p>\n Related Reading |\u00a0<\/i><\/b>Ripple Had Its Strongest Year Ever Despite The Sec\u2019s \u201cAttack On Crypto\u201d<\/a><\/em><\/strong><\/p>\n The next hearing will be a key day for the outcome of the Ripple case, thus XRP\u2019s price.<\/p>\n The timing is rather complicated for XRP. Its downtrend seems to follow the general crypto market movement. XRP is down 2.33% in the last 24 hours to $0,7634 as it shows in the next chart:<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n After the SEC filed the lawsuit against Ripple in December 2002, the XRP price plunged dramatically from $0.60 to $0.1748. It continued to drop and lose ground but remains inside the top 10 crypto Ranking.<\/p>\n Then, XRP recovered throughout 2021 and reached highs of $1.34 on November 10, 2021, although it didn\u2019t manage to close the year above $1.01.<\/p>\n The XRP enthusiasts\u2019 expectations are for Ripple to win the case and XRP to enter a massive rally, surging to its all-time high of $3.4 or even double numbers. However, the previous projections hadn\u2019t taken into account the current crypto market downtrend.<\/p>\n And if the Ripple case were to have a surprisingly negative resolution, XRP might see an outcome just as sad.<\/p>\n<\/div>\nThe SEC\u2019s Surprise Move<\/h2>\n
What Does It Mean For The Ripple Case?<\/h2>\n
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The Impact On XRP<\/h2>\n
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