Crypto News: Blockchain Association Backs Ripple In SEC Duel

Blockchain Association, a United States-based crypto advocacy group has come out in support of Ripple Labs. Amid its ongoing legal battle with the Securities and Exchange Commission (SEC). Claiming the case could be very important for the future of the crypto industry. 

 iexlusivenews reports that the advocacy group in an Oct. 28 post announced it will “stand” with the American crypto economy by filing an amicus brief, also known as “friend of the court” in the SEC enforcement action against Ripple.

This online news outlet understands that the SEC said nearly two years ago that it would sue Ripple (XRP), former CEO Christian Larsen, and current CEO Brad Garlinghouse in December 2020 for allegedly raising $1.3 billion through unregistered securities transactions using XRP.

“This case, which is just one in a long line of SEC efforts to regulate by enforcement, highlights the SEC’s efforts to cement and legitimize its overly broad interpretation of the Howey test,” wrote the association.

The Howey Test decides what qualifies as an investment contract and thus falls under the purview of US securities regulations.

The Blockchain Association explained in their brief why they believe the SEC and Chairman Gary Gensler’s views on securities rules might have “devastating implications” on the crypto industry.

They say that blockchain technologies have numerous applications in the cryptocurrency business.

Tokens can be used to pay for products and services, and transfer intellectual property rights.

Maintain inventory, and serve a specific role in a certain blockchain project.

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“Applying the securities laws to those tokens – whether or not through the prism of the Howey test – would significantly restrict those networks from functioning.”

What You Need To Know 

The group also alleges that the SEC is violating unambiguous Supreme Court and Second Circuit decisions declaring that transactions offshore are beyond the SEC’s jurisdiction.

“Though the blockchain industry is global, the federal securities laws are not. The Second Circuit has repeatedly re-emphasized the Supreme Court’s lesson on this subject.”

“Accordingly, both for liability and (if necessary) damages purposes, this Court should be mindful of the limits of the securities laws,” it added. 

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Kristin Smith, executive director of the Blockchain Association stated that this case might have far-reaching implications for the future of cryptocurrency.

Calling the SEC’s interpretations of securities laws “the single greatest threat to the future of this fast-rising industry.”

“By erratically applying these outdated standards to a modern and innovative technology, the SEC continues its “regulation by enforcement” pattern, punishing crypto companies with little justification or warning,” she said.

However, iexclusivenews Nigeria reports that the Blockchain Association stated that the lawsuit allows the industry to push back against the “SEC’s regulation by enforcement agenda” and potentially open the door to upgraded industry standards.