Ripple’s Defense: The Significance Of 56.1 Statements & The Fair Notice

John E Deaton, the founder of Crypto-Law.us, recently took toTwitterto express his thoughts on the ongoing legal battle between Ripple Labs and the U.S. Securities and Exchange Commission (SEC).

In response to an article by DJ Peter Vas, which highlighted attorney Jeremy Hogan’s view on the case, Deaton emphasized the significance of the 56.1 statements and counter statements filed by the parties.

Deaton pointed out that without access to these statements, it is challenging for anyone to accurately assess the evidence submitted by both Ripple and the SEC.

He highlighted an intriguing argument made by the company in its summary judgment brief regarding the presence of written contracts in certain XRP sales.

The company contends that since these contracts did not impose post-sale obligations, offer equity, or allow buyers to demand anything from it, they should not be considered investment contracts.

Expressing his opinion, Deaton disagreed with the company’s underlying contract argument and anticipated that Judge Analisa Torres would not support it either. Additionally, he believed that the fair notice defense presented by it should be seen as an insurance policy.

If the judge determines that the company violated Section 5 by engaging in investment contracts, the jury would then decide if Ripple had fair notice of these violations.

Deaton also discussed the ongoing debate about sealing certain documents, such as the Hinman emails, and speculated on a possible split decision.

He suggested that while the company might face the consequences of early XRP sales, the judge could classify its ODL and secondary market sales as non-securities. This outcome and the argument for fair notice could lead to a total victory for the company.

The outcome of this legal battle remains uncertain, and opinions vary on the potential consequences for Ripple. However, analyzing the 56.1 statements and counter statements and the judge’s decision regarding sealed documents will play crucial roles in determining the outcome.

Community Response: Jury Trial Or Judge’s Decision In The Ripple-SEC Case

The community expressed diverse opinions in response to John E Deaton’s tweet regarding the possibility of a jury trial in the case. One individual questioned whether leaving the decision to a jury was the best approach, considering Judge Analisa Torres’ expertise in the field. They raised concerns about how jurors with pro- or anti-crypto biases would be selected.

Others in the community characterized a jury trial as more of a theatrical performance. They emphasized the importance of voir dire, eliminating jurors based on lawyer questioning, which can heavily influence the trial’s outcome. They noted that jury trials are often seen as high-stakes gambles, leading to many cases settling before reaching that stage.

However, some community members pointed out that, in this particular case, the stakes are significantly asymmetric. They argued that the SEC has much to lose, including setting Fair Notice (FN) precedents and potentially damaging its reputation by disclosing corruption evidence, such as the Hinman emails.

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