The SEC was ordered by the court to provide Ripple with internal information on XRP, Bitcoin, and Ether. Ripple wins another victory in the SEC litigation as the SEC now has to disclose its confidential internal correspondence about XRP, Bitcoin and Ethereum.
The SEC is targeting Ripple Labs and its executives in a lawsuit alleging the XRP cryptocurrency was sold as a defense, but the blockchain company allegedly violated securities laws by failing to submit appropriate documents to order to cooperate with the securities regulator with the IPO.
In the past few months, the SEC has lost several court hearings, including Ripple’s success in pressuring the SEC to release documents related to Bitcoin, Ether, and XRP. The discussion of SEC of the top cryptocurrencies is vital to Ripple’s safety as the regulator previously stated that Bitcoin and Ethereum are not securities. Additionally, Ripple’s argument would be bolstered if XRP were addressed alongside the two largest cryptocurrencies by market capitalization.
THE order of Judge Sarah Netburn
Judge Sarah Netburn clarified her previous ruling last month about the SEC’s ability to keep internal records secret from Ripple in a new ruling this week.
It has now confirmed the SEC’s order to create and hand over documents on the three cryptocurrencies. According to Netburn’s five-paragraph decision, the SEC must establish relationships with third parties, including outside agencies and market participants, unless a privilege claim is asserted.
While such information can potentially be privileged, meaning it cannot be disclosed, the judge also ruled that related information, such as conference dates and names of attendees, may be available and searchable.
According to the decision, all records withheld due to authorizations must be listed in an authorization log. According to Hynes, Judge made it clear that she really needs Ripple and the SEC to sort it out on her own, which hasn’t worked out well so far. Ripple, on the other hand, is a clear winner with this order.
Ripple was sued by the Securities and Exchange Commission in December alleging the sale of XRP was an unauthorized offering of securities valued at over $ 1.38 billion.
The SEC has named Ripple’s chairman, Chris Larsen, and CEO, Brad Garlinghouse, co-defendants for reportedly supporting and facilitating Ripple’s violations. The lawsuit is based on whether XRP transactions are investment contracts and therefore securities that must be reported under Section 5 of the Securities Act of 1933.
Additionally, the SEC and Ripple cannot agree on which records should be released under the order, and the SEC argues that Ripple’s requests for internal information were inappropriate and irrelevant. But now the judge disagrees with the SEC’s position. At the April 6 hearing, Netburn said the Bitcoin and Ether discovery is important and I believe it is important for the court’s final review of Howey’s causes, but I also believe it is for the objective review of the defendants’ interpretation is relevant when considering the aid fee or count. It also seems relevant to Ripple’s fair defense to me.
The litigation continues despite Ripple and its executives filing a motion to dismiss the lawsuit. The judge has not yet reached a conclusion on this matter. To assist with the case, the SEC hired two senior litigators from Chicago, each with 18 and 25 years of experience.