Blockchain Association Gives Their Support to Ripple in Its Ongoing Legal Battle Against SEC.
The Blockchain Association, a United States-based crypto advocacy group, has reaffirmed its support for Ripple Labs ahead of its ongoing legal battle with the Securities and Exchange Commission (SEC), saying it could have significant implications for the future crypto market.
The Group Fill an Amicus Brief
It announced on Oct. 28 that it would file an amicus brief, also known as a friend of the court, in the SEC’s enforcement action against Ripple, in support of the American crypto economy.
In December 2020, the SEC announced they would sue Ripple’s former CEO Christian Larsen, and its current CEO Brad Garlinghouse for allegedly selling unregistered securities through XRP to raise $1.3 billion.
“This case, which is just one in a long line of SEC efforts to regulate by enforcement, highlights the SEC’s efforts to cement and legitimize its overly broad interpretation of the Howey test,” cited the association.
Using the Howey Test, we determine what constitutes an investment contract and therefore falls under the US securities.
The SEC Could Have Devastating Effects
As the Blockchain Association explained in its brief, the SEC and Gary Gensler’s views of securities laws could negatively impact the crypto industry.
In their view, blockchain technologies have many potential uses in the crypto world, including paying for goods and services, transferring intellectual property rights, tracking inventory, and for a specific purpose in a particular
“Applying the securities laws to those tokens – whether or not through the prism of the Howey test – would significantly restrict those networks from functioning.”
In addition, the association claims that the SEC ignores clear Supreme Court and Second Circuit precedents that indicate transactions abroad are outside its jurisdiction.
“Though the blockchain industry is global in nature, the federal securities laws are not. The Second Circuit has repeatedly re-emphasized the Supreme Court’s lesson on this subject,” it added.