As is now known, the SEC has officially resumed its case against Ripple following a landmark ruling on August 7, in which the SEC ordered Ripple to pay a $125 million civil penalty, far less than the $2 billion the regulator had been seeking. The argument is that the district court’s decision conflicts with established Supreme Court precedents and applicable securities laws.
Ripple’s chief legal officer, Stuart Alderotti, said he was disappointed with the SEC’s decision. He called the lawsuit “illogical” and “misleading” from the start, and noted that the court had already rejected the SEC’s claim that Ripple acted recklessly and that there were no allegations of fraud, victims, or losses.
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Aldroti’s comments drew a response from Cardano founder Charles Hoskinson, who sarcastically suggested that the ongoing Ripple case could replace the Howie test, the legal precedent used to determine whether certain transactions qualify as investment contracts under U.S. securities law.
Of course, it’s a bit of a joke from Hoskinson. But given that Howie is set in 1946, when the founders of XRP and Ripple weren’t even involved in the project, and that the Ripple issue has become a focal point for many in the cryptocurrency market, it might not be far off the mark.
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Many in the industry believe this case marks a key moment in getting some clarity on the rules surrounding digital assets, and the outcome could set new standards in securities law regarding cryptocurrencies.
