The SEC’s move to strike out Ripple’s fair notice defense was denied by Judge Analisa Torres, a United States District Judge, on Friday, giving Ripple yet another crucial victory.
The SEC filed a motion in April to dismiss XRP’s make-or-break fair notice defense, which sought to have the court compel the SEC to provide some information through a discovery order and prove that the agency “provided Ripple with fair notice that its distributions of XRP would be prohibited under the securities law – since 2013”
SEC argued that XRP’s request should be dismissed at the pleadings stage because it is a “legally deficient defense on which Ripple cannot prevail as a matter of law.” In an attempt to enhance its case motion, the agency also wrote to the court and attached some regulations.
As a result, the court determined on Friday that the SEC had failed to persuade it to strike down Ripple’s fair notice of affirmative defense by failing to cite case law where this had been done at the pleadings stage. Furthermore, the agency failed to prove that the continuation of Ripple’s fair notice claim would cause it “undue prejudice.”
In that case, the court was convinced that the SEC was on a mission to use delay tactics by lengthening the time, cost, and complexity of the case before it could go to full trial, leading to the decision to deny the SEC’s motion.
“At this early stage of the litigation, the Court will not rule that Ripple’s defense is invalid.” Accordingly, the SEC’s move to strike Ripple’s fair notice affirmative defense is DENIED.” The order was as follows:
However, given that the court has also refused a twin request filed in April by Ripple CEO Brad Garlinghouse and co-founder Chris Larsen to dismiss the action, the matter will now move to a full hearing, which would be a blow to the individual defendants.
“Today’s order makes it obvious that the SEC never gave Ripple fair notice that its XRP distributions, which have been legal since 2013, would ever be barred under securities law.”
Following the order, Stuart Alderoty, Ripple’s general counsel, made a statement
The XRP case, which was filed by the US Securities and Exchange Commission in December 2020, has been a thorn in the side for XRP investors who remain hopeful that the two sides will reach a settlement without going to full trial, or, better yet, that the trial will be completed in the shortest amount of time possible.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews