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 11, “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.
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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.
— Jeremy Hogan (@attorneyjeremy1) September 11, 2022
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
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 in Telegram vs SEC Lawsuit
The ongoing Ripple (XRP) case is not the first time that the influential organization has backed up 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.
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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 a security.
The notorious lawsuit ended with the court’s ruling for Telegram to return $1.2 billion to investors and pay a $18.5 million penalty to settle SEC charges. Telegram shut down its TON network project.
Ripple vs SEC Lawsuit Continues
Meanwhile, Ripple is still in a legal battle with the Securities and Exchange Commission, which 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 the Howey Test, which determines whether an asset qualifies as a security.
The lawsuit against Ripple Labs led to several of the biggest crypto exchanges delisting XRP tokens at the very beginning of 2021. The move triggered the XRP price crash by more than 63%.
Ripple Labs disagrees with the SEC’s statements, claiming William Hinman, the former director of the SEC’s Division of Corporate Finance, confused the company in 2018 when he publicly clarified that Ethereum (ETH) sales were not security transactions. The statement thereby triggered the 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 a potential pressure for the SEC.
Why You Should Care
The 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 the crypto industry.
Find out more on Telegram’s case:
Telegram’s token halted due to the US court and SEC
Check out what else is happening in the Ripple (XRP) vs SEC case:
SEC vs Ripple: Hundreds of XRP Holders Join Class Action Lawsuit
