Sidley represented Chamber of Digital Commerce in connection with SEC v. Ripple case

Sidley represented Chamber of Digital Commerce in connection with SEC v. Ripple case

Sidley is acting as the legal representation for Chamber of Digital Commerce in connection with its amicus curiae brief in the SEC v. Ripple case currently pending in the U.S. District Court for the Southern District of New York. The Chamber submitted a motion for leave to file its amicus brief in this case to be a true "friend of the court" and provide a legal framework based on settled SEC jurisprudence to create a predictable legal environment for the blockchain industry.

The decision in this case will have implications for blockchain market participants, including investors, trading platforms, and technology companies that seek to facilitate both securities and commercial transactions in digital assets.

In 2020 the SEC filed suit against Ripple Labs and its executive leadership, claiming Ripple's XRP digital asset was a security. In its brief, the Chamber does not take a view on whether Ripple's offer and sale of XRP is a securities transaction or on the merits of any arguments made by either party in the case.

The Chamber laid out the applicable legal precedent for initial offerings of digital assets and made the court aware that no federal law (or regulation) governs the legal characterization of a digital asset recorded on a blockchain. The Chamber also urged the court to clarify that the law applicable to an investment contract is separate and distinct from the law applicable to the subject of that investment contract. The Chamber further suggested that the court defer to the legislative branch to provide clear guidance for rulemaking, and cites several current legislative proposals that might provide appropriate guidance.

In a Press Release by Chamber of Digital Commerce Perianne Boring, Founder and CEO of the Chamber of Digital Commerce said, "SEC v. Ripple represents an opportunity for the court to shape the legal framework and rules of the road for the digital assets industry. Our preference would always be action by policymakers to set a clear and consistent set of rules for our industry. Absent that, however, this case appears to be a precedent-setting forum that will influence the digital asset marketplace in the U.S. moving forward."

The Sidley team was led by partner Lilya Tessler. This amicus curiae filing builds on the Chamber's previous amicus brief in the 2020 SEC v. Telegram litigation, in which a Sidley team led by Lilya Tessler also represented the Chamber.