Blockchain Association announced that it has filed an amicus brief in the U.S. Securities and Exchanges Commission’s (SEC) lawsuit against Ripple.
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.”
A ruling that adopts the SEC’s view of the law would “expand the landscape of assets that are considered securities in a manner contrary to the Supreme Court’s intent in Howey.”
The following statement is attributed to Kristin Smith, Executive Director of Blockchain Association:
“The SEC’s broad, haphazard interpretations of the securities laws currently stand as the single greatest threat to the future of this rapidly growing 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 By erratically applying these outdated standards to a modern and innovative technology, the SEC continues its “regulation by enforcement” pattern, punishing crypto companies with little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.”
Smith added:
“This is exactly the case with Ripple, which the SEC targeted nearly two years ago in an enforcement action alleging that the crypto company had failed to register a digital token as a security. The SEC must follow the law, they cannot impose their draconian view on the entire crypto ecosystem through an enforcement action.”
Smith continued:
“Ripple’s decision to fight this case in court provides an opportunity for the industry to push back against the SEC’s regulation by enforcement agenda and open the door to modernized standards for the industry.”
According to the Blockchain Association, they filed an amicus brief supporting a correct interpretation of Howey in the SEC’s two-year legal battle against Ripple.
The Association added that a judge now “has the opportunity to issue a substantive opinion on how Howey applies to digital assets.”
According to the Association, here’s what’s at stake.
They noted:
“For years now, the SEC has chosen to target crypto through a “regulation by enforcement” pattern. Rather than working toward joint solutions with industry members, they’ve instead sought to punish crypto companies with foggy and haphazard justifications.”
They also mentioned:
“In December 2020, the SEC did just that to Ripple, suing the company for trading a digital currency without registering the token as a security, despite the SEC’s lack of guidance on the issue. Since 2019, the SEC has regulated how U.S. securities laws apply to digital assets through enforcement actions rather than guidance or rulemaking.”
They further noted:
“Often, SEC enforcement actions end in one-sided settlement agreements rather than judicial opinions that factor in the unique facts presented to the court by both sides.Rather than settle, Ripple is fighting back through our judicial system. What this means is that a judge will soon rule on the issue.”
They pointed out:
“Should the court adopt the SEC’s version of the law, the landscape of assets falling under the SEC’s jurisdiction will expand beyond how the Supreme Court intended in Howey. We joined the fight with an amicus brief today to support our growing crypto ecosystem. No regulatory agency should unilaterally regulate crypto with outdated standards. Instead, it’s time for Congress to define a clear regulatory framework to guide the industry.”