The former head of the US Securities and Exchange Commission believes that the regulator has a good chance of losing $ 1.3 billion in a lawsuit against Ripple “on reality” in the case.
Attorney Joseph Hall also raised concerns about how the final SEC vs. Ripple matchup can look like, with implications for the entire industry.
The lawsuit alleges that the company and its co-founders Brad Garlinghouse and Christian Larsen failed to notify the Securities and Exchange Commission of the XRP sale that began in 2013, and that the tokens were unregistered securities. The Securities and Exchange Commission tried to prove that there was securities fraud as a result.
Hall, a former policy chief at the Securities and Exchange Commission, appeared on Thinking Crypto with host Tony Edward on Tuesday, saying:
“I’m not entirely sure what the SEC is planning to prove in the XRP lawsuit.”
The implications for the Securities and Exchange Commission (SEC) and for the cryptocurrency industry as a whole are enormous. As Hall said, “the Securities and Exchange Commission is taking a keen interest in the case, and” their entire regulatory project could be shut down if they lose the benefits of the case. ” He completed:
“And I still think there’s a good chance the [SEC] will lose the edge.”
Hall believes that Ripple has a strong defense on the grounds that the SEC did not give proper notice of the investigation. The Securities and Exchange Commission is required to notify individuals and companies that they are being assessed.
“I really like this argument. This is the main argument for a fair trial. The Ripple network was developed for years before being sued at the last minute.”
Jeremy Hogan, another lawyer who has been following and commenting on the Ripple case for some time, believes Ripple’s fair warning defense would be strong enough to keep it from the infamous fire. In a tweet on Wednesday, he cited precedent from the SECn v. Library Credits (LBRY) case in March last year, which was affected because the Securities and Exchange Commission failed to give fair notice.
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The Ripple case may have implications that will set the tone for crypto-related investigations and lawsuits in the foreseeable future after the verdict. If the SEC wins, it could launch a series of new investigations and lawsuits against crypto projects. If Ripple wins, it could force the Securities and Exchange Commission to significantly reduce its attempts to prosecute the cryptocurrency industry.