Ripple offered new chance to argue for SEC documents on XRP, ETH, BTC

Rick Steves

The SEC has claimed its internal documents, which include the agency’s discussions over the nature of XRP and ETH, are protected by DPP (Deliberative Process Privilege).

Magistrate Judge Sarah Netburn has ordered both parties in the SEC v. Ripple lawsuit to review and supplement their arguments regarding the deliberative process privilege (DPP).

For months, the Securities and Exchange Commission has refused to hand over documents regarding the agency’s thoughts and discussions over XRP, ETH, BTC, on the grounds of being privileged information.

Judge orders re-brief on DPP

In August 31, and facing Ripple and co-defendants’ motion to compel the SEC to deliver the information, Judge Sarah Netburn decided to perform an in camera review of those documents.

It seems, however, that a Second Circuit case has recently issued an opinion on deliberative process privilege that changed the law on what is protected by DPP. Judge Netburn is allowing the SEC and Ripple to re-brief for that reason.

“On November 29, 2021, the Court of Appeals issued a decision in Nat. Res. Def. Council v. U.S. Env’t Prot. Agency, No. 20-cv-422, 2021 WL 5549405 (2d Cir. Nov. 29, 2021), addressing the scope of the deliberative process privilege.

“In light of this decision, by December 8, 2021, the parties shall simultaneously file letter briefs no longer than three pages to supplement their arguments concerning Defendants’ motion to compel, ECF No. 289. SO ORDERED.”

SEC documents may support Ripple’s fair notice defense

The SEC has argued its internal documents, which include the agency’s discussions over the nature of XRP and ETH, are protected by DPP (Deliberative Process Privilege).

The defendants have recently explained those documents will expose the agency’s contradictions in its decision-making throughout the years, which proves the SEC didn’t provide fair notice that XRP could be considered a security.

William Hinman’s deposition has already provided a general feel that regulatory clarity is something lacking in the SEC’s communications. Jeremy Hogan, an attorney friendly with the XRP community, has pointed out two bombshells in that deposition that could strengthen the fair notice defense.

There are also the Ripple counsel’s findings that may reveal the SEC lied to the court on Hinman’s “personal views”. Firstly, the document could explicitly prove Hinman’s speech was not merely a personal opinion, but the SEC’s official policy. This has been a key issue in the lawsuit.

“The SEC sent an email to a third party telling them to analyze a digital asset using the factors in the Hinman speech; which speech was just his personal opinion. I understand now – it’s the SEC that needs clarity!”, attorney Jeremy Hogan commented, pointing out the agency’s contradictions.

Secondly, the guidance provided to the ‘third party’ might also be relevant to show the SEC’s inconsistency in terms of regulatory clarity. This can be used to support Ripple’s fair notice defense, which claims the SEC failed to explain the firm and the broad digital asset space that XRP could be considered a security.

Those documents were sealed by the court and added to the in camera review.



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