The Chamber of Digital Commerce, the influential trade association and advocacy group, is entering the notorious United States Securities and Exchange Commission (SEC) lawsuit against blockchain payment service provider Ripple (XRP).
As famous attorney Jeremy Hogan stated on September 11th, “the Chamber is wading” into the case. He further hinted that the XRP community should expect “something similar” to what Chamber did during the encrypted messenger Telegram’s legal battle with the SEC on its unregistered token offering case back in 2021.
The Chamber then argued, that while investment contracts used to raise funds for the digital asset are securities, the underlying digital asset itself is not a security.
The Chamber is wading into the Ripple v. SEC case.Expect something similar to what it filed in the Telegram case and the argument is that although the SALE of XRP might have been as a security, the token is not inherently a security.Similar to JDeaton, just not as compelling. https://t.co/D7m0kxKdp6— Jeremy Hogan (@attorneyjeremy1) September 11, 2022
The Chamber of Digital Commerce is a not-for-profit association that promotes the acceptance and use of digital assets and blockchain-based technologies. Founded in 2014, it is the world’s largest trade association that advocates for a pro-growth policy environment that fosters innovation, and investment in the digital asset economy.
Amicus (NASDAQ:FOLD) in Telegram vs SEC Lawsuit
The ongoing Ripple (XRP) case is not the first time when the influential organization backs up the industry players in their legal confrontations with the market watchdog.
Back in 2020, the US district court granted the request from the SEC ordering Telegram to halt issuing its GRAM tokens and thus delay the anticipated launch of the TON network on which the GRAMS would be used.
Telegram raised $1.7 billion back in 2018 by selling 2.9 billion GRAM tokens to accredited investors on a promise to deliver them when its proof-of-stake TON network will be launched.
A few years later the court decided that the initial sale and distribution of the GRAM tokens “were part of a larger scheme to distribute GRAMS into a secondary public market in an unregistered offering of securities”.
Soon after that, the Chamber of Digital Commerce filed an amicus curiae brief in the ongoing lawsuit. The document, which translates as “friend of the court” from Latin, refers to a person or a group that has a strong interest in the matter but is not a party to the case. It also acts as an ask for permission to influence the court’s decision.
The Chamber then argued, that while investment contracts used to raise funds for GRAMS are securities, this does not indicate that the underlying digital asset itself is security.
The notorious lawsuit ended with the court’s ruling for Telegram to return $1.2 billion to investors and pay an $18.5 million penalty to settle SEC charges. Telegram shut down its TON network project.
Ripple vs SEC Lawsuit Continues
Meanwhile, Ripple is still on a legal battle with the Securities and Exchange Commission, who filed a $1.38 billion lawsuit against Ripple Labs and its executives over the alleged sale of unregistered XRP “securities” back in 2013.
The SEC claims that Ripple Labs raised funds via an initial public offering (IPO), selling XRPs as unregistered securities and thus violating the ‘U.S. Securities Act’. The act, settled in 1933 relies on a Howey Test that determines whether an asset qualifies as a security.
The lawsuit against Ripple Labs led to several biggest crypto exchange delisting XRP tokens in the very beginning of 2021. The move triggered XRP price crash by more than 63%.
For its part, Ripple Labs is arguing SEC’s statements, claiming the ex-SEC William Hinman confused the company in 2018 when he publicly clarified that Ethereum (ETH) sales were not security transactions. The statement thereby triggered interpretation that his statements were an official ruling of the regulator’s view on digital currencies.
On the Flipside
- The expanding list of influential Ripple supporters may be considered as a potential pressure for the SEC.
Why You Should Care
Ripple vs SEC case may set a precedent for how digital assets should be treated and it’s the key reason why the lawsuit is so important for crypto industry.
Find out more on Telegram’s case:
Telegram’s token halted due to the US court and SEC
Check what else is happening on Ripple (XRP) vs SEC case:
SEC vs Ripple: Hundreds Of XRP Holders Join Class Action Lawsuit