Despite what appeared to be an apparent victory for the SEC, Ripple’s request for records detailing the watchdogs’ “trading policies governing digital assets” was denied by Judge Sarah Netburn.
It was stated in the ruling provided by attorney James K. Filan that the defendants were not permitted to obtain access to documents that would prove whether SEC employees were engaging in Bitcoin, Ether, or XRP transactions because doing so would be more likely to “cause confusion” than it would be to provide any relevant findings.
According to a prior court ruling, the regulator was required to present its cryptocurrency trading procedures.
Furthermore, at the time, the crypto business claimed that when its representatives met with SEC lawyers last month, the latter informed that SEC staff were forbidden from trading in XRP since a formal inquiry into Ripple had begun in 2019. The SEC denied the claim.
Ripple, on the other hand, contended that the SEC had failed to provide any official documentary evidence to back its assertion. Judge Netburn’s examination of the firm’s request, which was included in the refused motion, was characterized as follows:
“Defendants argue that individual trading decisions will, at a minimum, expose the lack of clarity regarding XRP’s status and whether the SEC believed XRP to be a security. Such evidence arguably would undermine the SEC’s allegations that the Individual Defendants acted recklessly and would bolster the Defendants’ fair notice defense.”
Judge Netburn maintained that such an argument did not appear to be relevant to the case because, as previously stated,
“Defendants have not shown that such individual trading decisions bear on the issues in this case. Although the SEC’s policies (or absence of policies) may provide relevant evidence related to fair notice or recklessness, how an Ethics Counsel viewed a trading decision is more likely to cause confusion or create collateral litigation disputes.”
Netburn further pointed out that financial conduct disclosures made by SEC personnel were protected under the Privacy Act, and that Ripple had yet to produce evidence that suspending these statutory rights would make a meaningful difference to the case’s outcome.
Attorney, James K. Filan, stated in a recent tweet addressing the current judgement that, among other things,
“The Court directed the SEC to provide Defendants any documentation supporting SEC counsel’s statement during the August 25, 2021 meet and confer that, after the formal order of investigation was issued as to Ripple on March 9, 2019, SEC employees could no longer trade XRP.”
While the SEC’s individual trading records may be off-limits for Ripple for the time being, this recent move underlined that the watchdog must submit data to support its assertions that agency workers were forbidden from trading XRP during the year 2019.
Despite the fact that the SEC appeared to have won this round of the battle, the war between the two organizations is far from finished.
