Digital Commerce Council (CDC) in United States Securities and Exchange Commission v. In the case of Ripple Labs and its executives Bradley Garlinghouse and Chris Larson, it has requested an amicus brief. Lilia Tessler, a member of the Sidley Austin firm, filed a package of documents, including a brief, in the U.S. District Court for the Southern District of New York on Wednesday.
CDC is the world’s largest blockchain and digital asset trade group with over 200 members including industry players, investors and law firms. The Council argued that it does not have “the view that the supply and sale of XRP is a securities transaction”, but it is interested in “ensuring that the legal framework applied to digital assets under investment contracts is clear and consistent”. Adding:
“Maintaining this distinction is critical to developing a predictable legal environment with technology-neutral precedent, which this court has the power to do.”
The documents later restate the question, “Would the well-settled law applicable to securities transactions applicable to the offer and sale of investment contracts differ from the law applicable to secondary transactions in digital assets that have previously been subject to investment?” In view of the fact that there is no federal law (or regulation).
The Chamber is entering the case of Ripple v. SEC.
Expect something similar to what he presented in the case of Telegram and the argument that although the XRP SALE may be considered 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
In its proposed amicus brief, the CDC acknowledged the “fact-based” Hawaii test:
“It is sometimes difficult to apply even to experienced lawyers, let alone to market participants without legal training.”
The CDC asked the court to re-define the difference between guarantees and those contracts, which are not guarantees. The issues mentioned include the subject matter items as usual in these discussions. Here, cases involving whiskey safes, telephones, condominiums and beavers are mentioned.
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The CDC continued to argue that the SEC “has provided guidance on the application of securities laws” but that “the SEC’s enforcement approach is similarly based on a different picture based on Howie” and that the agency has failed to provide guidance to market participants. What you asked for.
The CDC maintains that Ripple is using a new application for contract analysis of secondary transactions on Ripple, but has not provided guidance on how to implement that analysis. However, the SEC still expects market participants to determine whether an asset is a security or not.
The CDC notes that there is no precedent for secondary transactions with the subject securities contracts, but states:
The Chamber of Commerce believes that digital assets are treated as commodities as long as they do not include financial interests such as legal debt or equity rights.
The CDC noted that the proposed Lummis-Gillibrand Responsible Financial Innovation Act (RFIA) has taken a similar position when it introduces the concept of “ancillary assets.” in addition –
“The Council respectfully requests that this court be guided by the principles set forth in the RFIA if it decides to clarify the nature of digital assets that are the subject of an investment contract or defers its decision to the Legislature.”