The SEC Files A Strike Against Ripple’s Defense. Could It Drown XRP?

The U.S. Securities and Exchange Commission (SEC) made a surprise attack on the Ripple case by filing a letter of supplemental authority to strike Ripple’s “fair notice” defense. Simultaneously, the token XRP is down 2.33% in the last 24 hours to $0.7 following the market’s downtrend.

The SEC’s Surprise Move

The SEC has taken a bold move in the SEC vs. Ripple case, which is likely to resolve around April of this year. This leaves many asking if their expectations might change.

The American regulator is using a winning move from another case to strike at Ripple’s key arguments.

John M Fife was taken to court by the SEC along with five other entities he controlled in September 2020. He had sold $21 Billion of penny stocks, and made a $61 Billion profit without being registered as a security dealer.

FIFE’s defense adopted an argument similar to Ripple’s, alleging the SEC hadn’t given them a fair warning and the term “dealer” can be widely interpreted. The court rejected this argument last month.

What does it mean for the Ripple Case

Naturally, the regulator now aimed to use this denial to strike at Ripple’s “fair notice” key defense.

Similarly, Ripple’s “fair notice” defense alleges the regulator failed to notify them about a possible violation of federal securities laws and claimed the term “investment contract” is being misused by the SEC, adding that “The SEC’s theory, that XRP is an investment contract, is wrong on the facts, the law and the equities.”

XRP was not deemed a security by foreign regulators. The truth is that the reverse is true. Unfortunately, the U.S. is an outlier.

The SEC is using the FIFE case latest outcome to insist that the term “investment contract” is bound by legal parameters since 1946:

In Ripple’s case, binding authority construing the term “investment contract” has existed since 1946. W.J. Howey Co., 328 U.S. at 298–99. Thus, Fife provides additional authority for striking Ripple’s fourth affirmative defense.

The terms of each case are different. Attorney Jeremy Hogan explained via Twitter that the FIFE case outcome “marginally helps the SEC’s position in its Motion to Strike Ripple’s Fair Notice Defense so the SEC filed it with the court.”

Although the SEC is trying to make a move out of the similarities from both cases, Hogan claims that FIFE’s “was in a very different stage of litigation and the standard is completely different than the SEC v. Ripple case.

In the “Fife” case, the Defendant tried to argue “Fair Notice” in order to dismiss the lawsuit entirely (and failed) because the burden is very high on a party moving to strike a pleading. In the Ripple case, it’s the SEC that is trying to strike the affirmative defense of Fair Notice and it has the high burden to meet.


Brad Garlighouse, CEO of Ripple, expressed optimism to CNBC that he would see Ripple at the end 2021.

Clearly we’re seeing good questions asked by the judge. This isn’t just Ripple. It has wider implications.

XRP builds momentum with a 7% increase as Ripple launches a new ODL Partnership

The Impact of XRP

Ripple Had Its Strongest Year Ever Despite The Sec’s “Attack On Crypto”

The next hearing will be a key day for the outcome of the Ripple case, thus XRP’s price.

It is difficult to predict the timing of XRP’s decline. The general movement in crypto markets seems to be its downtrend. As shown in the next chart, XRP has dropped 2.33% to $0.7634 in 24 hours.

ripple| XRPUSD on



In December 2002 the SEC brought a lawsuit against Ripple. The price of XRP plunged to $0.60 from $0.1748. It lost ground, dropped further and is still in the Top Ten Crypto Ranking.

Then, XRP recovered throughout 2021 and reached highs of $1.34 on November 10, 2021, although it didn’t manage to close the year above $1.01.

The XRP enthusiasts’ expectations are for Ripple to win the case and XRP to enter a massive rally, surging to its all-time high of $3.4 or even double numbers. However, the previous projections hadn’t taken into account the current crypto market downtrend.

XRP may also be affected by the Ripple outcome.

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