SEC Strikes Back Against Ripple: Binance Argument Rejected in Final Court Filing — Is This the End for SEC v. Ripple Case?

Ripple's defense draws heavily on the recent ruling in the SEC v. Binance Holdings Ltd. case. The ruling, issued on June 28, 2024, held that there was insufficient evidence to classify secondary market transactions of BNB tokens as securities transactions. Ripple believes that this precedent is crucial because it is similar to their own case.

SEC Rebuts Ripple’s Binance Arguments

In the ongoing legal dispute between Ripple and the SEC, the SEC has responded to Ripple’s latest arguments. Ripple cited SEC v. Binance to highlight regulatory ambiguity and oppose the SEC’s “enforcement regulation” approach. However, the SEC rejected these arguments, claiming that the Binance ruling is irrelevant to their lawsuit against Ripple.

The SEC argued that Ripple selectively used parts of the Binance ruling to support its lawsuit. Specifically, the SEC pointed out that Ripple’s interpretation was biased and did not consider the ruling in its entirety. The SEC also avoided addressing secondary market trading of Binance Coin and programmatic sales of XRP, which Ripple had pointed out.

SEC’s Fair Notice Argument

A key argument for Ripple involves the fair notice doctrine, which requires individuals to clearly understand the legal claims against them. Ripple argued that they were not fully informed, but the SEC countered by citing the 2017 DAO report, which set regulatory expectations for the crypto industry before most of Ripple's XRP sales.

Expert Opinion and Judicial Insights

The SEC stressed that Ripple had received legal advice warning that its XRP sales could be problematic, suggesting that Ripple was aware of the possible violations. Ripple argued for a fine of no more than $10 million, while the SEC proposed a much higher fine of $2 billion.

Last month, Ripple's legal team cited the settlement between the SEC and Terraform Labs as a precedent for determining an "appropriate" fine.

But the SEC still asked for a $102.6 million settlement in its response to Ripple's letter regarding the TerraForm Labs consent judgment.

Former SEC official John Reed Stark described the Binance ruling as a significant loss for the exchange. Meanwhile, Judge Amy Berman Jackson cited the XRP programmatic sales ruling, acknowledging that the SEC’s position was inconsistent with the Supreme Court’s directive.

The final outcome of the SEC v. Ripple case remains uncertain, and the latest filings suggest that disputes over legal interpretation and penalties continue.