The SEC v. Ripple case is heating up, and some attorneys have mentioned the SEC took a step back in the most recent hearing. Additionally, two senators drafted a new crypto bill. As one of the nation’s most ardent cryptocurrency advocates, the Republican Senator Cynthia Lummis, in addition to the Democratic Senator Kirsten Gillibrand, presented the new bill, one of the most promising to come from Congress yet. While many XRP holders may believe this can end the XRP lawsuit, it would only be applicable to new sales of XRP. That being said, it’s still important to keep an eye out for XRP lawsuit updates.
XRP Lawsuit Update: Did Ripple Just Put The Pressure On The SEC?
According to the most recent court documents, the Defendants respectfully submit this reply letter in further support of their motion about the SEC’s deficient responses to the Defendants’ Fourth Set of Requests for Admission. Inside these court documents were seven main points arguing there were deficiencies in the SEC’s responses to the Defendants’ requests for admissions.
1. Office of Investor Education and Advocacy (OIEA) & FinHub Inquiries About XRP
The SEC’s objection that it cannot answer these RFAs because it does not understand the meaning of market participant, OIEA Request, or FinHub Request is not tenable.
According to the Defendants, the SEC certainly understands what it is being asked to admit that before December 22, 2020, multiple people have asked OIEA and FinHub if XRP is a security and the SEC never once said in response that it was. To dodge these admissions, the SEC adopts a hyper-technical approach that faults Defendants for not having provided a precise definition of market participant notwithstanding the SEC’s own repeated, broad, and undefined usage of that term throughout this litigation.
2. SEC Concedes It Provided Inaccurate Information
In their response, the SEC says that they provided false information to the defendants and did not dispute the relief sought by defendants. As a minimum, the SEC should amend their response to include an admission that corrects the date.
Ripple Labs attorneys find it hard to understand how the SEC failed to fix a misstatement for more than ten months. Moreover, Ripple Labs attorneys mention they didn’t find out about the error and the need to fix it if not for this lawsuit.
In response to the parties’ meet and confer, the SEC withheld disclosure of the corrected date, proffering the corrected date only in its opposition letter to the Court, and still failing to state how or when the SEC detected the error, or to state the factual basis for claiming that the SEC’s revised date is accurate. Relief that Defendants seek is necessary to avoid any prejudices to them that arise because of the SEC’s admitted mistake.
3. Securities Exchange Trading Policies
According to the Defendants, the SEC has intentionally misread these RFAs. The RFAs are demanding to know when the SEC first instituted internal trading policies relating to digital assets and how they operated, at the policy level.
The Defendants state that, to avoid responding, the SEC dodges answering requests by claiming they only request information on whether particular employees had preclearance requirements as-applied. That is not what these RFAs are requesting. For the sake of clarity, Defendants only seek the regulations, not any individual SEC employees trading records or practices.
4. The 2013 Meeting With The SEC & Regulators
After confirming Ripple officials met with members of the SEC and other U.S. regulatory agencies on or about October 29, 2013 (Reply to RFA 490), the SEC still does not want to reveal any parts of RFAs 491-506 since it could not confirm that Larsen was present at the meeting.
The lawyers of Ripple Labs, Bradley Garlinghouse, and Christian Larsen note the documents produced by Ripple in this case and that these show Mr. Larsen’s attendance. Additionally, the SEC’s refusal to answer these RFAs is improper because even if after reasonable inquiry the SEC could not confirm Mr. Larsen’s attendance at the meeting, Rule 36 requires the SEC to set forth a qualified answer that fairly meets the substance of the request.
5. The No-Action Letters & The SEC’s Rationale
According to Ripple’s reply to response, the SEC states that it cannot comply with these RFAs, citing that since all of their regulatory authority could have a relation to a novel asset, the term relating to a digital asset in the RFAs is too vague to comply with. See opposition. in other words, the SEC can’t give them a no-action letter because it lacks information or knowledge of what they’re talking about and it would help if they clarified that they want to know about no-action letters in general.
Ripple Labs’ lawyers also noted, the SEC readily admitted to Defendants that this fact in negotiating the scope of discovery requests and can be verified by a records in the public domain. Yet now the SEC refuses to answer, not because it does not understand these requests, but to avoid supplying a usable admission on an undisputed issue.
6. Request For Admission (RFAs) Surrounding The Production Of SEC Documents
In this XRP lawsuit update, Ripple attorneys mentioned notably absent from the SEC’s opposition is an acknowledgement that following the defendants’ filing of this motion, the SEC belatedly turned over additional documents and information related to RFAs 364, 391, and 409. Even though these RFAs are now moot, RFAs 255 and 260-262 remain unresolved. In addition, the SEC’s opposition letter does not state that the production for the issues relevant to these RFAs is complete (see D.E. 486 at 6). Therefore, Defendants request that the Court compel production from the SEC as it pertains to the requests for production in the RFAs. The request appears to be without dispute. And the lawyers noted the Court should order it.
7. Were The SEC Personnel’s Recorded Remarks Authentic?
Another interesting note in the latest XRP lawsuit update were Ripple lawyers noted, after citing no supporting authority, the SEC says it cannot admit the authenticity of its recordings of remarks delivered by SEC officials because the content is outside of the SEC’s control and could change.
They don’t require the SEC to take a stand on whether the webpage is always and irrevocably stable; they merely want the SEC to acknowledge that the information on the webpage today is real. The SEC’s statement clarifies that it has no ground to contest the authenticity of the videos, and the SEC will need to answer the allegation that it lied. Or, alternatively, if the Court trusts the SEC’s doubt about any future changes to the video websites, the Court could authorize Defendants to download the videos on which they currently appear, as long as they have the same, limited purpose.
Final Remarks: XRP Lawsuit Update
Now that you’ve seen the most recent XRP lawsuit update, it’s important to stay on top of what’s going on, especially if you’re an XRP holder. Attorneys with cryptocurrency experience have mentioned Ripple’s recent reply puts the SEC on its backfoot. That said, Legal Favor staff will continue to break down the intricate XRP lawsuit update documents, so you don’t have to. Be on the lookout for our next SEC v. Ripple lawsuit update.
