- Law firms
- Related documents
- Both sides say other is stretching the law
- Judge could rule without trial or narrow dispute
(Reuters) - Ripple and the U.S. Securities and Exchange Commission accused one another of stretching the law, as they argued for a ruling on whether the XRP, the world's seventh-largest cryptocurrency, is a security.
Both sides urged U.S. District Judge Analisa Torres to rule in their favor without sending the case to trial in papers filed on Friday.
The final round of briefs seeking summary judgment brings the case closer to a ruling that could further define what digital assets are considered securities in the U.S.
The judge could grant either side a win without a trial, or decide to narrow the issues that go before a jury.
Ripple's founders created XRP in 2012. The SEC sued the San Francisco-based company and its current and former chief executives in December 2020, alleging they have been conducting a $1.3 billion unregistered securities offering since the token's creation.
Ripple argued in its brief that the SEC was seeking a ruling that XRP was an investment contract, but "without any contract, without any investor rights, and without any issuer obligations."
"The SEC is asking the court to rewrite the statutes that define its authority," Ripple said.
The SEC said Ripple is relying on a "made up" test that ignores U.S. securities law.
The U.S. Supreme Court defined an investment contract as "an investment of money in a common enterprise with profits to come solely from the efforts of others," in the 1946 case SEC v. Howey Co.
The profit piece "is about expectations, not about commitments," the SEC said in its brief on Friday.
Ripple and its executives' statements were the type that would lead reasonable investors to expect profits from the company's efforts to develop uses for XRP, the agency argued.
Torres has accepted briefs from companies that say they rely on XRP technology and cryptocurrency industry groups, as well as a group of XRP holders who said the SEC has not shown purchasers were influenced by or aware of Ripple's statements.
The case is SEC v. Ripple Labs Inc, U.S. District Court, Southern District of New York, No. 20-CV-10832.
For the SEC: Jorge Tenreiro, Jon Daniels, Elizabeth Goody and others
For Ripple: Kellogg, Hansen, Todd, Figel, & Frederick; and Debevoise & Plimpton
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