XRP Soars 4% In Response To Ripple’s SEC Victory

Key Points:

• Ripple’s XRP surged by 4% in the last 24 hours to $0.53475 after its response to the SEC’s letter of supplemental authority.
• Ripple’s lawyer, Michael K. Kellogg, countered that the SEC’s Commonwealth case argument doesn’t apply to the legal battle between the crypto firm and the financial regulator.
• Kellogg noted that “reasonable market participants” concluded that Defendants’ offers and sales of XRP were not investment contracts, and told the SEC so.

Ripple’s XRP has shown significant growth in the last 24 hours, rising by 4% to reach a high of $0.53475 at the time of writing.

This growth in price follows Ripple’s response to the letter of supplemental authority from the US Securities and Exchange Commission (SEC) regarding its motion for summary judgment on April 13, 2021.

In the letter, Ripple’s lawyer, Michael K. Kellogg, countered the SEC’s argument in the Commonwealth case, stating that it did not apply to the legal battle between the crypto firm and the financial regulator. The SEC had previously argued that its enforcement action against the investment firm Commonwealth Equity Services provides additional authority for the court to reject Ripple’s fair notice defense claims.

Kellogg said that the Commonwealth case was “an out-of-circuit, unpublished district court opinion.” Moreover, he argued that the case lacked contemporaneous evidence to support its defense. Kellogg noted that “reasonable market participants, trying to understand what the SEC would permit or prohibit, concluded that Defendants’ offers and sales of XRP were not ‘investment contracts,’ and told the SEC so.”

Kellogg further pointed out that there was abundant evidence that the SEC was aware of the widespread regulatory confusion and helped to sow it by repeatedly offering (and then disclaiming) vague guidance that differed from the Howey test. He concluded that the SEC’s argument that it had an “unbroken chain of district court decisions rejecting fair notice defenses” was irrelevant to its case, as the regulator’s reliance on them had already been rejected by the court.

Earlier in the week, a pro-XRP lawyer, Jeremy Hogan, highlighted why the SEC’s classification of XRP was wrong. Hogan argued that the token doesn’t fit into the “investment contract” category espoused by the financial regulator. Hogan’s argument was based on the fact that XRP is not a security because it has a functional use beyond being an investment contract. He also pointed out that the Howey test used by the SEC to determine whether a token is a security does not apply to XRP. Overall, these developments suggest that the legal battle between Ripple and the SEC is far from over and that the outcome of the case could have significant implications for the future of the cryptocurrency industry.

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