Ripple’s General Counsel Stuart Alderoty says the United States Securities and Exchange Commission’s (SEC) theories are subject to fair notice defense.
Stuart Alderoty, General Counsel at Ripple Labs, has continued to provide clarity on the court’s ruling in the SEC lawsuit. In a tweet yesterday, Alderoty said the court clarified that SEC’s theories are subject to fair notice defense.
PSA for other crypto defendants– check out footnote 20 where the Court makes it clear that the SEC’s theories (other than to Institutional Sales) are potentially very much subject to a Fair Notice defense. 👀 pic.twitter.com/Pe5uI4iMgW
— Stuart Alderoty (@s_alderoty) July 14, 2023
Per Alderoty, the court made the position in footnote 20 in its latest ruling in the SEC v. Ripple lawsuit. The tweet is part of Alderoty’s effort to help crypto businesses that are embroiled in different lawsuits against the SEC.
Recall that the court ruled that Ripple’s past sales to institutional clients are securities. Consequently, the court declined to address “Ripple’s asserted fair notice defense as to the other transactions and schemes.”
Furthermore, the court clarified in the footnote that its decision is limited to Ripple’s institutional XRP sales because “SEC’s theories as to the other sales in the case are potentially inconsistent with its enforcement in prior digital asset cases.”
SEC Fuels Confusion Via Its Claims
Alderoty’s clarification comes a few hours after the SEC expressed excitement about the ruling. In its statement, the SEC said the court rejected Ripple’s fair notice argument.
According to the SEC, the court rejected the argument because “the Howey test is clear, and claiming ignorance is not an excuse to violate securities laws.”
Following the comment, many crypto enthusiasts might think the SEC’s theories are not subject to fair notice defense. Thus, prompting Alderoty to provide clarity for other crypto defendants currently in legal tussles against the SEC.
Coinbase CLO and Deaton React
Interestingly, top crypto stakeholders have reacted to Alderoty’s remark. In a tweet yesterday, Paul Grewal, the Chief Legal Officer at Coinbase, said, “No question.”
No question. Absolutely no question. https://t.co/IVhNM010p7
— paulgrewal.eth (@iampaulgrewal) July 14, 2023
It is worth noting that Coinbase is one of the crypto businesses currently engaged in a lawsuit with the SEC.
Furthermore, pro-XRP lawyer John Deaton reacted to the post and stated the importance of reading footnotes. Deaton said the denial of Ripple’s fair notice argument only applies to the company’s past institutional sales.
Always read the footnotes. Exactly the point. So many lawyers were saying she rejected the fair notice defense. That is not true. She rejected its application to Institutional sales only. She said SEC enforcement actions in the past provided fair notice related to Institutional… https://t.co/PLjCk868Rc
— John E Deaton (@JohnEDeaton1) July 14, 2023
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Source: https://thecryptobasic.com/2023/07/15/ripple-general-counsel-says-sec-theories-are-subject-to-fair-notice-defense/?utm_source=rss&utm_medium=rss&utm_campaign=ripple-general-counsel-says-sec-theories-are-subject-to-fair-notice-defense