Ripple scores biggest win in XRP lawsuit, likely to force SEC into settlement

Rick Steves

This significant Ripple win may trigger an abrupt end to the XRP lawsuit as many close to the case believe the SEC will rather settle than hand over its internal documents. 

As expected, Judge Sarah Netburn denied the SEC’s Motion for Reconsideration of the DPP Ruling in the latest court order in the SEC v. Ripple lawsuit.

This motion was viewed as the “biggest decision in the XRP lawsuit” because of the consequences it would bring for the outcome of the case, the future of both Ripple and the SEC, as well as the future of XRP and probably the overall cryptocurrency ecosystem in the United States.

This significant Ripple win may trigger an abrupt end to the XRP lawsuit as many close to the case believe the SEC will rather settle than hand over its internal documents. The SEC has 14 days to file an objection to this decision to District Judge Torres.

The ruling might be an even bigger victory for Ripple as the order includes a “bullet proof section” that is expected to prevent an appeal, which could force the SEC into settlement even sooner.

SEC fails attempt to “have it both ways”

Judge Netburn explained that she ordered the production of certain SEC documents – after concluding they were not protected by DPP – in order to allow the defendants to challenge the SEC’s allegations that Larsen and Garlinghouse were objectively reckless in believing that XRP was not a security and that Ripple was on “fair notice” that XRP was a security.

The court added that reconsideration of a previous order is an “extraordinary remedy to be employed sparingly in the interests of finality and conservation of scarce judicial resources.

In an attempt to claim privilege, the SEC said the court overlooked that Bill Hinman made his 2018 speech on BTC and ETH in order to communicate the approach of the SEC’s Division of Corporation Finance, and that the speech was the end-product of “significant collaboration” by many staffers across the SEC, as evidenced by the 68 drafts and associated commentary in the SEC’s privilege logs. Such deliberations should be protected by DPP, the plaintiff claimed.

“The SEC’s assertion that the Speech was intended to communicate Corporation Finance’s approach to regulating digital asset offerings is inconsistent with the SEC’s and Hinman’s previous position that the Speech was intended to and did reflect his personal views”, the order stated.

“The SEC seeks to have it both ways, but the Speech was either intended to reflect agency policy or it was not. Having insisted that it reflected Hinman’s personal views, the SEC cannot now reject its own position. The Speech was not an agency communication, and the deliberations as to its content are not protected by the privilege.”

“The SEC has failed to demonstrate that the Court overlooked any factual matters that were put before it in deciding the privilege’s applicability to Entry 9 of Appendix A. Its motion for reconsideration is denied. However, mindful of the “important public interests” served by the privilege, the Court agrees that clarification will aid the parties. ”

The court then clarified that its January 13, 2022 order compels production of all emails related to and drafts of the Speech on the SEC’s privilege log, except communications between staff discussing the speech in the context of how it implicates other, separate agency deliberations.

Read this next

Metaverse Gaming NFT

DCentral Miami brings together all of Web3, NFT, DeFi, Metaverse

The world’s biggest Web3 meeting entitled DCENTRAL Miami is set to take place November 28-29, featuring a lineup of some of the biggest and most influential names in the blockchain space.

Digital Assets

Crypto ban expands across UK banks as Starling joins ‎crackdown

UK digital bank Starling has banned ‎all customer payments related to cryptocurrencies, another blow for the crypto traders ‎who recently saw a sizable number of banks deciding not to ‎finance the wobbly asset class.‎

Interviews

Markets Direct at FIA EXPO 2022: Traders know what they want from brokers

The FIA Expo 2022, one of the most prestigious events within the global derivatives trading industry, took place in Chicago on 14 & 15 November.

Interviews

FIA Expo 2022: TNS addresses public cloud limitations with hybrid infrastructure

November is the month of the FIA Expo, one of the largest futures and options conferences in the world, bringing together regulators, exchanges, software vendors, and brokers in one place: the Sheraton Grand Chicago Riverwalk. 

Retail FX

Italy’s regulator blacks out Finance CapitalFX, MFCapitalFX

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

Suspected leader of Honk Kong ramp-and-dump scam appears in court

A leader of a sophisticated ramp-and-dump scheme made his first court appearance in a Hong Kong court today, charged with market manipulation and various criminal offences. The case stems from an earlier joint operation of Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), and the local police. 

Institutional FX

Cboe’s James Arrante discusses growing demand for fixed income, FX algo

We caught up with James Arrante, senior director of FX & US treasuries product and business management at Cboe Global Markets, to uncover emerging trends in the FX and fixed income markets and learn more about the bourse operator’s recent initiatives.

Retail FX

Eurotrader acquires UK broker Petra Asset Management

Eurotrader Group has formally entered into the UK market with the acquisition of FCA-regulated broker, previously named Petra Asset Management Ltd. The new entity operates under the brand name Eurotrade Capital Ltd.

Inside View, Retail FX

The Game of Chess Continues – OPEC, China and the Oil Market

Over the past decade, the US has been complaining about the amount of power which the BRIC group, and specifically China, has on the global economy. BRIC stands for Brazil, Russia, India and China; these were the world’s fastest growing economies. Only in the past 10 months, the US has turned their attention toward OPEC due to the prices of fuel. Nevertheless, China seems to have a strong influence even over the price of crude oil.

<