United States-based crypto lobbying organization Blockchain Association has thrown in support for Ripple Labs in connection to its ongoing legal altercation with the Securities and Exchange Commission (SEC). Emphatically, the crypto advocacy group explained that the outcome of the lawsuit will be crucial to the future of the crypto industry.
Three days ago, Blockchain Association asked the court for permission to back the American technology company as a ‘friend of the court’ in its case with the U.S SEC. Also, the organization filed another motion requesting authorization of leave from a federal court so as to join the Ripple-SEC case.
According to the filed amicus motion “The SEC’s extremely broad interpretation of the securities laws would have devastating effects on the industry (and even outside the industry).” Kristin Smith the Executive Director of the Blockchain Association further emphasized the effect of the lawsuit on the future of the digital assets industry.
“The SEC’s broad, haphazard interpretations of the securities laws currently stand as the single greatest threat to the future of this rapidly growing industry. By erratically applying these outdated standards to a modern and innovative technology, the SEC continues its ‘regulation by enforcement’ pattern, punishing crypto companies with little justification or warning,” Smith said
At the same time, the organization pointed out the positive use of blockchain technologies in the crypto industry including the fact that ‘tokens can be used to pay for goods and services, conveyance of intellectual property rights, inventory tracking and for a specific purpose in a given blockchain project.’
SEC Indicts Two Ripple Labs Executives
In December 2020, two Ripple Labs executives were called out for allegedly raising $1.3 billion by holding an initial public offering (IPO) of XRP, which was unregistered security at that time to investors in the United States and all over the world. These executives were the former Chief Executive Officer Christian Larsen and the current CEO Brad Garlinghouse.
Additionally, Ripple was indicted by the SEC for allegedly offering large amounts of XRP running into billions in exchange for non-cash services like market-making and labor.
The crypto lobbying group sees the SEC’s move as an approach to cement and validates its overly broad interpretation of the Howey test, which determines what qualifies as an investment contract and is subject to U.S. securities laws.