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

Digital Assets

DoraHacks raises $20m from FTX, Liberty City, Circle, Gemini, Crypto.com, more

DoraHacks partners with several web3 ecosystems, including Solana, Polygon, and Avalanche to provide access to the global developer community and has been driving key research.

Interviews

AC Interview – Neil Swanepoel, Sales Development Representative

One of the biggest challenges faced by brokers is finding the best tools/methods to attract and convert new traders. With trading becoming increasingly more popular among Gen Z, it is this young group of up and coming traders that hold the most potential for brokers. To help better understand this unique demographic we spoke to Autochartist Sales Manager and new trader Neil Swanepoel. 

Digital Assets

BlockTower teams up with Centrifuge to bring real world assets to DeFi

The protocol empowers businesses to tokenize non-crypto assets such as mortgages, invoices and consumer credit, to create asset-backed pools that create an investment opportunity, and as a result, democratizing access to capital.

Digital Assets

Solana-powered game DeFi Land launches Play-and-Earn features

The Play-and-Earn mechanics announcement comes on the heels of a collab between DeFi Land and STEPN. DeFi Land will soon announce chain integrations, an alpha mobile version, and a multichain feature. 

Retail FX

Spotware rolls out Manager’s API for cTrader brokers

Spotware Systems, a technology provider for the electronic trading industry, has released its new Manager’s API for Brokers, providing powerful tools for server-server integration.

Metaverse Gaming NFT

Dubai Museum taps Binance to jump onto NFT bandwagon

Dubai’s Museum of the Future, the $136 million UAE government-sponsored museum that opened a few weeks ago, is joining forces with Binance NFT to roll out a range of digital products on blockchain.

Digital Assets

Ripple and Lithuanian FINCI partner for XRP-based payments

Ripple is looking to expand its presence in Europe, forming a new partnership with Lithuanian electronic money institution FINCI.

Digital Assets

Crypto.com enables Shopify merchants to accept crypto payments

Crypto.com has integrated with Canadian e-commerce giant Shopify so global merchants can accept crypto payments and save on processing fees through cash-final settlements.

Institutional FX

FX volume drops 13pct at CLS Group in April 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in April.

<