Ripple Labs Inc said in court papers Friday that a recent U.S. Supreme Court decision supports one of its key defenses in the U.S. Securities and Exchange Commission’s case over the cryptocurrency XRP.
The San Francisco-based blockchain payments company said the ruling on Tuesday limiting the government’s ability to levy penalties on U.S. taxpayers who fail to report foreign bank accounts emphasized that federal laws must give “fair warning” of what they prohibit.
Ripple asked U.S. District Judge Analisa Torres to consider the decision when she rules in the SEC’s case accusing the company and its current and former chief executives of conducting a $1.3 billion unregistered securities offering by selling XRP, which Ripple’s founders created in 2012.
Ripple and the executives have denied the allegations, and the company has argued that XRP has traded and been used as a digital currency.
The SEC has asked Torres to decide that Ripple had fair notice that XRP was a security under U.S. law. Ripple and the executives have said the question of whether or not the law was vague should go to trial.
Torres may decide a trial is unnecessary to determine whether XRP was a security, or narrow the issues that go before a jury.
A ruling in the case could further define what digital assets are considered securities in the U.S.
The case is SEC v. Ripple Labs Inc, U.S. District Court, Southern District of New York, No. 20-CV-10832.
(This story has been corrected to fix a typo in paragraph 6)
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