Since late last year, the digital asset space has been following the battle between Ripple and US Securities and Exchange Commission. The problems started when the watchdog sued the firm for selling unregistered tokens when the company launched their cross-border token, XRPs. SEC believes that the CEO, Brad Garlinghouse sold the tokens to waive the crypto’s liability as an asset.
While the fintech head had previously said that XRPs aren’t securities, the counsel has more things to say regarding the lawsuit. The firm is going all-out to assure it wins the legal battle between the regulator. SEC’s approach to regulations is controversial, according to some people. Some people believe the regulator does not operate with clear and unambiguous laws.
Garlinghouse’s counsel raises arguments against SEC’s claims
Garlinghouse’s lawyer has put up some argument to assure the win of his client. The legal counsel, who wrote a letter to Analisa Tires recently, saw the case as a regulatory overreach on SEC’s part. The counsel, whose name is Matthew Solomon, is working towards meeting an amicable conclusion to the court case.
While SEC has won numerous lawsuits filed against firms in the past, legal experts believe that Ripple could be the winner as XRPs are mostly used for cross-border settlement. In January, the CEO had fired at the regulator for the “lack of clear regulatory framework.” The entrepreneur also said the regulations cause more confusion for those controlled by the regulatory body.
Matthew Solomon first explained that the watchdog does not understand XRPs. The lawyer also said the token’s transactions, market, nor Ripple’s business show that XRPs are securities. He said that in 2015 and last year, FinCEN had seen that XRPs were digital currencies. FinCEN mandated Ripple to put up AML measures to prevent XRPs from being used for money laundering, which is usually not put up for securities, according to him.
Solomon believes that SEC has not proven its claims
The counsel raised his second argument and said the SEC is not satisfied with simply trying to fit XRPs into securities regulations but wants to hold Brad Garlinghouse personally responsible for the token sales. SEC had singlehandedly drawn-out Brad Garlinghouse to be responsible for the token sales, and that does not sit well with the lawyer.
The attorney opined that the CEO’s assistance regarding the token’s sales was his job. The lawsuit is at a critical point where the arguments hold a stronger weight than before. The CEO had said Ripple would stand up against SEC’s “bullying” in the digital asset space and seemed determined to win the case.
Solomon added that SEC’s claim regarding the entrepreneur’s aiding and abetting the sales does not meet legal requirements. According to the region’s laws, to prove the case of abetting and aiding, the plaintiff has to prove that the accused did the thing with disregard for associating himself with an improper thing while still assisting the act. The lawyer said that the watchdog has failed to prove that claim. He also argued that the watchdog had not proven that Ripple sold it in the United States.