Ripple recently submitted an appeal for a motion for acquiring answers from the SEC about Ether being security. Jeremy Hogan (an Attorney) pointed out that this dimension of questions is a wonderful step as the case of the SEC will decline their case no matter what their answer is. In the last month, Gary Gensler (the chairman of the SEC) said no to answer this very question at the Aspen-Security Forum. His response signifies that the commission does not want to uncover itself more than this. However, as the question has been asked in a formal court setting, the SEC seems to be somewhat perplexed for feeling shame about being out of answers.
Ripple defense debates on unfair notice
Last December, the U.S. securities department has submitted a case against Ripple before Christmas. The department accused Ripple of being engaged in the illegitimate securities sales of about $1.3 billion since 2013. As the discovery period was going on, the strong defense has been developed by Ripple on several aspects, and the Fair-Notice-Defense is prominent among them. The defense presented the point that Ripple was assuming XRP, Ether, and Bitcoin to be categorized as equivalents by the SEC.
As the ex-director of the SEC, William Hinman’s statement neither considered Bitcoin nor Ether to be the securities according to the bill. Thus, Ripple supposed the same for XRP. The defense debated that it was not given fair notice by the SEC as it was unaware of violating the securities law, which was only applicable to it. During the discovery period, it was clarified that Hinman’s stance for Bitcoin and Ether was just an individual opinion. Therefore, it should not be associated with the regulator.
This opened a new dimension for the case regarding whether Ether is considered a security. What were the reasons behind its operation without impediment? And if it is not so, then why has the department targeted Ripple only?
A lose-lose situation for the SEC
Hogan reveals that opening the front of the status of Ether’s securities poses a difficult situation for the SEC without considering their answer. He added that in the case of answering “no,” Ripple would get the opportunity to compare Ether and XRP because it is known that just Ethereum owns an ICO. Otherwise, “yes” would not be a politically comprehensible answer on behalf of the SEC. Hogans describes Ripple’s to be in a win, win situation.