Onda was given another small win over sales and classification of cryptocurrency XRP in its legal battle with the Securities and Exchange Commission (SEC).
The President Judge has now rejected a motion to publish financial records linked to Ripple’s co-founder Chris Larsen and CEO Brad Garlinghouse in the case following the access of Ripple to the SEC’s internal communications last week.
The SEC hoped that the financial data could help to bring forward its case against Mr Ripple and its executives accused by the continued sale of XRP to the public of violations of the federal security law.
However, the reclamation was decided to represent an unjustified privacy invasion, and that funds provided for the defendant through crypto-exchange cannot be categorically linked with the sale of XRP.
“The SEC’s conviction that the bank records of the individual defendant could demonstrate a speculative transaction (and that the individual defendant does not provide the record of the XRP transaction) is not a basis for ordering expansive findings into personal financial accounts,” ruled Judge Sarah Netburn.
In December, the SEC filed an action against Ripple and its management to blind the company and send XRP tumbling prices.
Instead of a currency or means of exchange, the matter depends on XRP’s classification as a security (i.e., a financial asset that investor intends to profit from). Ripple violated several sections of the Securities Act of 1933, because it failed to provide a securities registration statement or to seek special exemption, the official complaint argues.
“Over a years without registered securities, Ripple has been able, by selling XRP without the type in its registration statements and in future periodic and current submissions, to raise at least US$ 1.38 billion, without the type of financial and managerial information that would normally be provided,” SEC said.
The regulator also believes that these funds were used to develop cases of use for XRP which might be used to justify its currency classification.
Ripple has consistently maintained that XRP should be considered in the same way as Bitcoin and Ethereum, which are not subject to an SEC proceeding. The SEC’s theory, that XRP is an investment contract, is incorrect on the facts, the law, and the stock in a December official response.
Although the broader legal battle is still a long way off, Garlinghouse and Larsen have suggested that their motions for dismissal of the individual proceedings against them are a positive sign of the recent judgment.
The price of XRP rose to $1,47 per unit during this weekend, up from around $0,25 after the first notification of the lawsuit.