Ripple executive Brad Garlinghouse and Chris Larsen have denied the allegations by SEC and asked the court to drop the case.
In reply to an altered report by the SEC, The two attempted to prove that the two primary laws that define “security” within the legal system were not inclusive of digital assets.
SEC is trying to relay an important regulatory message to the market:
Ripple’s reply also denied any relief for the SEC concerning the judgment or any other form of consolation. Garlinghouse and Larsen requested the court asking it to dismiss the case and grant judgment in favor of the defendants.
The response submitted by Garlinghouse says that the SEC is seeking litigation after the fact. The response also emphasized that the commission could not snare this case through deliberate guidance and rulemaking.
The defendant claimed:
The SEC is trying to convey an essential regulatory warning to markets.
Garlinghouse claimed that the regulator is seeking to establish an entirely new standard for how digital assets will be managed in the country and that they claim SEC is said to have “gone way too far.”
The response tried to concentrate on how the SEC seeks to exercise its own rules and regulations, and this is a field that is still developing but without offering clear guidelines on the subject to market. It also said that the SEC would only be attempting to win a legal victory by leveraging unclear regulations.
The cost of establishing the new policy can’t be incurred at the expense of an individual’s rights.
It is not a security:
The defense argued and cleared that it was not a security XRP token or investment security. Garlinghouse and Larsen have not breached Section 5 of the Securities Act since the token does not constitute an investment contract or security. It also states that neither defendant in the case was alleged to have offered distributions or sales in connection with XRP forming an “investment contract.” However, it is also stated that Registration was not needed for any sale or offer of XRP by any private person or Ripple.
Source: Google News Trend