A federal judge in New York has actually rejected Ripple Labs’ movement to order the U.S. Securities and Exchange Commission (SEC) to produce records of its staff members’ crypto transactions in an effort to prove that the company did not consider XRP to be a security.
The SEC Wins One Against Ripple
According to an official records, Ripple filed the demand on August 27. Their reasoning for the request was that if it were found that the SEC staff members had actually traded XRP, it would at a minimum expose the SEC’s previous lack of clearness about the nature of XRP and at a lot of show that the SEC did rule out XRP to be a security before.
Accuseds argue that private trading choices will, at a minimum, expose the absence of clarity regarding XRP’s status and whether the SEC thought XRP to be a security. Such evidence perhaps would weaken the SEC’s accusations that the Individual Defendants acted recklessly and would bolster the Defendants’ fair notice defense. Accuseds contend that they are entitled to know whether the SEC allowed its staff members to sell, buy, and hold XRP “as market participants” during the appropriate period.
But Judge Sarah Netburn disagrees with Ripple for several factors.
First, she supports the importance of the SEC’s argument that “the preclearance choice process does not include any determination by SEC Ethics Counsel that a trade adhere to the securities laws,” i.e., the SEC Ethics Counsel had actually not proposed any arrangement expressly pertinent to XRP, so the trading history of SEC staff members is irrelevant for the case.
Another key argument for the denial was essentially the absence of legal validation to authorize Ripple’s demands. The federal rule safeguards the privacy rights of SEC workers as U.S. citizens.
As to the yearly certifications that Defendants seek, Congress has presumptively restricted disclosure of such monetary info through federal personal privacy statutes and guidelines in order to keep government employees’ privacy.
Ripple attempted to utilize a similar argument earlier. The SEC requested for access to Ripple’s internal interactions via Slack. As Cryptopotato previously reported, Ripple argued that producing such files wouldbe a long, costly procedure. This was not enought for the Court, which wound up judgment in the SEC’s favor.
Finally, the court describes that, in reality, the SEC had no trading policy relating to digital assets throughout the period of interest for the suit, so its employees did not act in infraction of the rule even if they had traded cryptocurrencies.
XRP Remains (Relatively) Unfazed
XRP did not overreact to the disappointing news. Normally speaking, the XRP market relocates pace with the developments of the Ripple-SEC scenario, with rallies when Ripple ratings a win and crashes when the San Francisco-based business has any problems (like today’s).