The latest XRP news saw Ripple file a motion to compel the SEC to produce preclearance trading documents concerning SEC employees’ XRP holdings.
August 30, 2021, | AtoZ Markets – Ripple has filed a petition to compel the US Securities and Exchange Commission (SEC) to produce documents showing whether its employees were permitted to trade Bitcoin, Ethereum, and XRP tokens. This was announced by attorney James Filan.
“Defendants are demanding anonymized documents reflecting decisions regarding pre-clearing trading in XRP, Bitcoin and Ethereum. Alternatively, the data can be presented in aggregated form. The defendants also require the provision of certificates relating to the ownership of XRP by SEC employees,” the petition says.
Ripple stressed that in response to previous requests from the company, the regulator refused to disclose any information necessary to understand the agency’s attitude towards digital assets.
The document says that until January 19, 2018, the Commission did not consider digital assets as securities, so its employees “were free to buy, sell and hold XRP without any restrictions.” This information was confirmed by the ex-director of the corporate finance department of the SEC, William Hinman.
“These arguments undermine the SEC’s position. The Commission did not restrict its employees on XRP trading, despite its long-standing rule prohibiting them from engaging in securities transactions without prior authorization. This fact indicates that at least until January 2018, the SEC did not come to the conclusion that XRP is a security,” the petition says.
The company also noted that BTC, ETH, and XRP have never appeared on the list of “prohibited holdings”. XRP was only added on April 13, 2018, to the “watch list” created by the SEC to monitor assets subject to individual review, but not a complete ban.
The commission is due to respond to Ripple’s petition by September 3. The regulator may again refuse to disclose information.
On August 31, a hearing will take place at which the parties will discuss the deliberative process privilege of the SEC. This is a principle of law that allows the regulator to refuse to provide documents or testify, citing the confidentiality of data and sources.
The information that the Commission refuses to disclose mainly concerns its views on Ethereum. Judge Sarah Netburn has already recognized this data as relevant for the subsequent analysis of the Howie test.
Lawyer Jeremy Hogan explained that XRP belongs to the same asset class as the second-largest cryptocurrency in terms of capitalization. In 2018, the SEC stated that ETH is not a security, which means that a similar decision should be made with respect to Ripple tokens.
According to Hogan, the SEC is trying to convince the court that the department did not take an official position regarding the status of Ethereum. The lawyer called it a “gambit.”
“[The Commission] recognizes confusion over the status of digital securities in exchange for strengthening its position regarding XRP’s qualification as a security. […] While arguing that the SEC did not take a definite position on the status of Ethereum, it can insist that comparing the two assets is meaningless. Whether this argument will work is a difficult question. However, such a gambit at least allows the regulator to put forward a similar argument,” said Hogan.
Earlier, the SEC filed a petition with the court to provide the agency with access to “terabytes” of messages from Ripple employees in Slack. Filan said today that this data, as well as information regarding the dispute over the privileges of the deliberative process, will be hidden from the general public until a decision is made on the relevant petitions.
#XRPCommunity #SECGov v. #Ripple #XRP The Court has granted motions to seal regarding 1) the Slack communications dispute and 2) the privileges disputes. The motions to seal were granted pending resolution of the underlying motions. Both are Text Only Orders. Screenshot attached. pic.twitter.com/dubGlxW5dX— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) August 28, 2021
Recall that as part of the proceedings with the regulator, Ripple also requested and was granted access to Binance documents.
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