Thursday, 2 February 2023

Crypto News

CDC gives nod to Lummis-Gillibrand bill in proposed amicus brief in SEC v. Ripple case

CDC gives nod to Lummis-Gillibrand bill in proposed amicus brief in SEC v. Ripple case

The Chamber of Digital Commerce (CDC) has requested to file an amicus brief in the case of the United States Securities and Exchange Commission v. Ripple Labs and its executives Bradley Garlinghouse and Chris Larsen. Liliya Tessler of the firm Sidley Austin filed a package of documents, including the proposed brief, with the U.S. District Court of the Southern District of New York on Sept. 14.

The CDC is the world’s largest blockchain and digital asset trade group, with over 200 members that include industry players, investors and law firms. It argued that the Chamber does not have “a view on whether the offer and sale of XRP is a securities transaction,” but it is interested in “ensuring that the legal framework applied to digital assets underlying an investment contract is clear and consistent,” adding:

“Maintaining this distinction is critical to developing a predictable legal environment through a technology-neutral precedent, which this Court has the power to do.”

The documents later restate the question as “whether the well-settled law applicable to the offer and sale of an investment contract that is a securities transaction is properly distinguished from the law applicable to secondary transactions in digital assets that were previously the subject of an investment contract” in light of the fact that “no federal law (or regulation) specifically governs the legal characterization of digital assets recorded on a blockchain.”

In the proposed amicus brief, the CDC acknowledges the “fact-intensive” Howey test, which:

“is at times difficult for even experienced lawyers to apply, let alone market participants without legal training.”

The CDC asked the court to reiterate the difference between contracts that are securities and the subjects of those contracts, which are not securities. The cases cited include a hodgepodge of subject items, as is already customary in these discussions. Here, cases involving whiskey casks, payphones, condominiums and beavers were mentioned.

Related: SEC objects to XRP holders aiding Ripple defense

The CDC continued its argument saying that the SEC…

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