© CoinDesk Provided by Blockchain Association Executive Director Christine Smith (Shutterstock/CoinDesk).The Blockchain Association, a Washington-based crypto lobbying organization, on Thursday sought permission to assist Ripple as amicus curiae in its ongoing defense to the Securities and Exchange Commission (SEC).
The SEC sued Ripple in late 2020 for allegedly selling XRP as an unregistered security. Since then, the case has gone through various procedural motions and the parties recently conducted a brief evaluation. On Friday, the Blockchain Association asked the judge overseeing the case for permission to join the case, as well as the actual amicus brief.
"The SEC's over-interpretation of the securities laws will have a dramatic impact on the industry (and even beyond the industry)," he said.
A legal memorandum supporting the dismissal motion states that the factual essence represents the various uses of crypto-tokens in the industry, rather than Ripple itself.
Also Read: SEC Seeks Immediate Decision on Whether Ripple, XRP Sales Violate Securities Act
The report said courts should look to the specific purpose of a mark, and the SEC said an "illegal" secondary sale proved the company violated federal securities laws.
The document states that many tokens are used in secondary market transactions and do not meet certain principles of the Howe test, a Supreme Court case commonly used as precedent to explain whether an asset is a security.
Much of the briefing focused on the question of how securities laws apply to tokens beyond the initial sale.
"Securities laws that do not consider how assets can be issued as security are inconsistent with the type of investment agreement Howey is trying to enforce," he said.
The other groups, Investor Choice Advocate Network and SpendTheBits Inc., filed their amicus briefs Friday with the court's permission.
These companies argue that the SEC is using a "vague" definition of "investment agreement" to make their case, and point to ongoing legislative efforts to determine where the SEC's jurisdiction over cryptocurrencies begins and ends.
"Pending a settlement, the SEC does not have the authority to fill what it deems to be a vacancy," the filing said.