Ongoing litigation between Ripple and the US Securities and Exchange Commission (SEC) took another turn this week when Ripple gained access to Binance internal documents and other companies’ documents.
CEO Brad Garlinghouse may have acted outside the scope of the SEC’s jurisdiction, according to the documents, which could be crucial evidence.
Judge Sarah Netburn of the United States Magistrate Court granted Ripple CEO Brad Garlinghouse’s motion to “Obtain international discovery” of Binance records. According to the docket, the approval was granted on August 3, while a duplicate request was denied on the same date.
“ORDER granting 274 Letter Motion for Discovery. The Court will communicate with counsel to arrange delivery of the letters.”
Garlinghouse is accused of selling more than 357 million XRP tokens on cryptocurrency trading platforms to investors “all over the world” as part of the SEC’s case against Ripple for selling securities that were not registered with the agency.
On August 2, the legal team representing Garlinghouse filed a request with Binance Holdings Limited for documents that were “relevant to the case and not readily available through other means.”
This was based on his good faith belief that Binance possessed unique documents and information regarding this case, as stated in the filing by Ripple CEO Justin Sun.
This set of records pertains to XRP transactions that were allegedly carried out by Garlinghouse, and it may provide evidence that the Ripple executive carried out the transactions outside the jurisdiction of the Securities and Exchange Commission (SEC).
According to Ripple’s legal team, Section Five of the 1933 Securities Act applied only to domestic sales and securities offerings, and that the alleged illegal XRP sales were only applicable to domestic sales and securities offerings.
Garlinghouse’s XRP sales, according to the lawyers, were “overwhelmingly made on digital asset trading platforms outside of the United States” and therefore were not subject to the law that the SEC has invoked against the company.
Garlinghouse and Larsen filed a motion in June, petitioning international authorities to request documents from a number of other cryptocurrency exchanges based outside of the United States, including Bitstamp, Huobi, and Upbit.
The SEC, according to Ripple, has no authority over XRP as a security because it is a medium of exchange that is used for both international and domestic transactions. Judge Netburn granted the firm permission to depose William Hinman, a former SEC official who had publicly stated that ETH was not a security. The deposition took place in mid-July.
The lawsuit against Ripple began in December 2020, when the Securities and Exchange Commission filed a complaint against the company, alleging that Garlinghouse and co-founder Chris Larsen had been conducting a “unregistered, ongoing digital asset securities offering” through their XRP token sales.
