Former SEC official predicts regulator 'will lose on the merits' of case against Ripple

cointelegraph.com:

A former executive from the Securities and Exchange Commission believes the regulator has a good chance of losing its $1.3 billion lawsuit against Ripple “on the merits” of the case.

Attorney Joseph Hall also voiced concerns over what the SEC’s endgame could be regarding the high-stakes case against Ripple (XRP), which will have ramifications for the entire industry.

The lawsuit alleges that the company and its co-founders, Brad Garlinghouse and Christian Larsen, failed to notify the SEC about its sale of XRP beginning in 2013, and that the tokens are unregistered securities. The SEC is trying to prove that securities fraud took place as a result.

Hall, a former Managing Executive for Policy at the SEC appeared on the Thinking Crypto podcast with host Tony Edward on Feb. 22 where he said:

The implications for the SEC and for the crypto industry as a whole are massive. As Hall puts it, “the SEC has a lot riding” on the case, and “their entire regulatory project could be basically shut down if they lose on the merits” of the case.” He continued:

Hall believes that Ripple has a strong defense on the basis that the SEC failed to give fair notice of its investigation. The SEC is required to notify individuals and corporations that they are being scrutinized.

Another attorney who has been following and commenting on the Ripple case for some time, Jeremy Hogan, also believes that Ripple’s fair notice defense will be strong enough to keep it out of the proverbial fire. In a Feb. 23 tweet, he cited a precedent from the case the SEC brought against Library Credits (LBRY) last March which was stricken because the SEC failed to give fair notice.

Uhhmm... In the LBRY case, LBRY actually asserted a Fair Notice Defense and not only did it