Ripple recently filed a motion to bind the United States Securities and Exchange Commission [SEC] to disclose policies and information about its employees who trade cryptos such as Bitcoin, Ethereum, and XRP. This motion will add to Ripple’s fair notification defense.
According to the presentation provided by attorney James K. Filan, Ripple wants the SEC to provide,
“… anonymized documents reflecting pre-authorization business decisions regarding XRP, bitcoin, and ether, or alternatively, for that information to be produced in aggregate form.”
Additionally, documents related to XRP holdings of SEC employees were also mentioned in the filing of motions.
“The defendants are also seeking certifications regarding XRP holdings of SEC employees, again, either with redaction of personal information or in aggregate form. We met and consulted with the SEC on this issue on July 8, July 15, August 18 and August 25, with no progress. “
Onda’s previous requests were served with “the SEC’s refusal to produce certain information” comprehensive to the defendants’ understanding of the SEC’s policies regarding digital assets and whether or not the SEC allowed its own employees to trade it. disputed digital asset, XRP.
In early June, the court had accepted Ripple’s motion to force the SEC to produce its business policies regarding digital assets. Post that the SEC developed a policy dated January 19, 2018 titled “Ethical Guidance Regarding Digital Assets.” Ripple noted that until January 19, 2018, the SEC did not view digital assets as securities and therefore its employees were “free to buy, sell and hold XRP without any restrictions by the SEC.”
In the aforementioned document, the defendants also state that,
“This evidence provides strong corroboration for Defendants’ defenses in this case and undermines the SEC’s claims. Specifically, the now recognized fact that the SEC itself did not restrict its own employees from the sale or purchase of XRP, despite its long-standing regulation against its employees who engage in securities transactions without prior authorization, indicates that the SEC It had not concluded, before at least January. 2018, that the XRP sales and deals were securities transactions. “
Furthermore, even though the SEC maintained a list of “Prohibited Holdings” pertaining to falling securities
Within the SEC’s securities trading ban, BTC, ETH, and XRP never appeared on this list. The “Watch List” created by the SEC to identify assets that are subject to review on a case-by-case basis rather than a blanket ban, XRP added only after April 13, 2018.
This meant that “any transaction by SEC employees in XRP after April 13, 2018, was evaluated on a case-by-case basis, again through the pre-authorization process.” Ripple claimed that the SEC has refused to present this crucial information to the case and was now seeking to pressure it through the Court.
The court has given the SEC until September 3 to respond to this motion. However, what happens if the SEC refuses to cooperate once again?
As noted in a answer to Filan’s Twitter update,
“The SEC can absolutely decide not to follow the court order. What happens after a period of time is that the judge will issue sanctions against you. If the SEC continues to ignore the order, it may ultimately lead to the case being dismissed “
As Ripple and SEC continue their back and forth, the crypto community awaits the August 31 deadline for the discovery of facts. Furthermore, given that the court has already granted the joint request of the parties involved to push for the deposition of Ripple CEO and Founder Brad Garlinghouse and the deposition of Chris Larsen, the lawsuit appears to be far from reaching a conclusion.
This is a machine translation of our English version.
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