SEC Claims Recent Court Win Weakens Ripple’s Core Argument

In a supporting letter filed Tuesday, the SEC alleged that Ripple’s “fair notice” argument is moot, based on a recent, separate court win for the regulator


Vector-3D/Shutterstock modified by Blockworks


The SEC has claimed that its recent win against broker dealer Commonwealth Equity Services should be taken into account in its Ripple lawsuit, which could end with a summary judgment any day now. 

In a supporting letter filed Tuesday, the SEC says Ripple’s “fair notice” argument is moot, based on a recent court win for the regulator. The SEC successfully shut down this same defense argument in its case against Commonwealth, which it sued in 2019 for conflict of interest violations. 

Ripple’s fair notice defense is based on a recent Supreme Court ruling; Bittner v. United States. 

The US had made a case against Romanian immigrant Alexandru Bittner, who, with 272 bank accounts, broke the law when he failed to file a relevant report with regulators for each one. 

US authorities demanded he pay a $10,000 Bank Secrecy Act fine for each, while the Supreme Court ruled he only had to meet a one-time payment of $10,000. 

“Bittner did not learn of this reporting obligation until returning to the United States many years later. After he returned, he filed the required reports, but not in time to avoid violations,” wrote law firm Faegre Drinker in a recent blog.

The Supreme Court sided with Bittner, saying that fair notice hadn’t been given, specifically to the point that it would demand individual fines for each undisclosed bank account. Ripple is similarly arguing that fair notice was not adequately provided. 

In this week’s filing, the SEC said that based on other, long standing Supreme Court precedents, namely those established in Upton v. SEC, which established the Howey Test, have given Ripple ample time to adhere to securities laws. 

Ripple’s legal team did not return Blockworks’ request for comment.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


Commissioner Peirce would have done things differently if she could when it comes to her agency’s crypto enforcement actions


MicroStrategy discloses the purchase of 16,000 bitcoin throughout November


Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion


Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks


DYDX supply will climb by up to 80% after the Friday unlock, but a couple factors make a massive sell-off appear unlikely


Switzerland-based Pando Asset, which has crypto products trading on the SIX Swiss Exchange, now looks to the US