US court has stopped the SEC from accessing records of legal advice that Ripple sought or received about XRP’s status as a security.
May 31, 2021 | AtoZ Markets – Justice of the Peace Sarah Netburn has rejected a petition from the US Securities and Exchange Commission (SEC) for access to the records of legal advice received by Ripple regarding the legal status of the XRP token.
According to the department, lawyers could notify Ripple that XRP has signs of a security, even before the start of the token sale. On May 7, the regulator sent a petition to the court to disclose the relevant information.
“Ripple claims that the documents requested by the SEC are protected by attorney secrecy, which no one denied,” Netburn said.
The regulator did not tell the company that XRP tokens can be considered as securities, the defense argued. On May 27, the agency submitted an insolvency memorandum to the court regarding the need for advance notice.
According to the SEC, the actions of the regulator in more than 70 similar cases against other cryptocurrency companies were sufficient for Ripple to draw a correct conclusion about the status of the supported asset.
Attorney Jeremy Hogan considers the judge’s ruling “extremely important.” The lawyer explained that it will allow Ripple to continue to adhere to its line of defense.
Judge DENIES the SEC's motion to compel production of Ripple's lawyer opinion letters. Very important because the Judge states Ripple's subjective beliefs re XRP are NOT relevant to the Fair Notice defense, blocking the road the SEC wanted to use to fight the Defense. https://t.co/MHsx569BmO— Jeremy Hogan (@attorneyjeremy1) May 30, 2021
Netburn stressed that the decision applies to this specific issue.
“The court does not take any specific position as to whether Ripple’s claimed protection is justified or deserves attention,” the judge added.
XRP reacted with a rise of almost 14%. At the time of writing, the token is trading at $0.99.
As a reminder, in December 2020, the SEC accused Ripple and its leaders of an unregistered sale of securities under the guise of XRP tokens for $1.3 billion. Later, the regulator adjusted the lawsuit, focusing on the actions of Brad Garlinghouse and Chris Larsen.
In April 2021, Netburn granted Ripple’s petition for access to SEC documents disclosing its “interpretation and views” regarding Bitcoin and Ethereum.
In May, Netburn authorized the SEC to request information on Ripple as part of a memorandum of understanding with foreign regulators.
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