SEC and Ripple lawsuit: concerns over similarities with Fife case
SEC and Ripple lawsuit: concerns over similarities with Fife case
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SEC and Ripple lawsuit: concerns over similarities with Fife case

By Eleonora Spagnolo - 10 Jan 2022

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The SEC has compared the case with Ripple to the one with John M. Fife, sending the New York court a memorandum in which it compares the judicial events. In that case, Fife’s defensive arguments were rejected.

SEC and Ripple case: similarities with Fife

According to the SEC, John M. Fife’s case involves five companies that he controlled and whose business was centred on the purchase of banknotes convertible into penny stocks, which were then converted into shares and sold at a discount to market value. In this way, they allegedly made profits of $61 million.

This business also came under fire from the SEC for the unauthorized sale of securities, the same charge brought against Ripple. The lawsuit began in September 2020, ahead of XRP’s lawsuit in December 2020.

Fife’s defence was similar: they never received any fair notice from the SEC that their conduct was wrong and violated the law. The judge, however, rejected this argument. 

Could the same happen with Ripple?

The lawyer’s opinion

According to Jeremy Hogan, an experienced lawyer who is following the Ripple case, the two cases are different because Fife’s defence was all about fair notice, i.e. failure to notify illegal behaviour. 

In the case of Ripple, it is the SEC that is trying to revise the concept of fair notice. Either way, there will have to be some evidence on which the judges will base their ruling. For Hogan, the cases are similar but different.

XRP price
The price of XRP has not suffered particular drops after the latest news on the lawsuit with the SEC.

 

The price of XRP

XRP has not been particularly affected by this news. In the past few days, it has been falling like the entire crypto market. Over the past week, its price has fluctuated from 84 cents to 72 cents. 

As of today, XRP is hovering just above parity at $0.74

Brad Garlinghouse’s opinion

Despite the lawsuit with the SEC, according to Ripple CEO Brad Garlinghouse, 2021 was the best year yet for the XRP ecosystem:

The problem of having to provide answers to a growing industry remains. But regulatory uncertainty, according to Garlinghouse, as well as the aggressiveness shown by SEC chairman Gary Gensler, are already driving many crypto companies out of the US.

He hopes that Congress understands that it needs to act now and provide answers to the industry. 

However, the SEC’s new move with respect to Ripple seems to be going in a completely different direction.  

Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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