SEC v. Ripple: CEO Brad Garlinghouse seeks info on XRP sales from Binance

Rick Steves

“The SEC’s failure to allege domestic offers and sales should be fatal to its claims for the reasons set out in the motion to dismiss.”

In the context of the SEC v. Ripple lawsuit, in which the agency claims individual defendants Brad Garlinghouse and Chris Larsen aided and abetted in the sale of unregistered securities, the Ripple chief executive officer has filed a motion to obtain international discovery.

The individual defendant is seeking to obtain documents from Binance Holdings Limited, the cryptocurrency exchange operator, according to the documents.

“Mr. Garlinghouse seeks foreign discovery on the basis of his good faith belief that the listed entity possesses unique documents and information concerning this case, and specifically, concerning the process by which transactions in XRP allegedly conducted by Mr. Garlinghouse on foreign digital asset trading platforms were conducted.”

SEC v. Ripple: XRP is not subject to SEC under pending bill, said attorney Thien-Vu Hogan

The SEC alleges that the Ripple CEO sold more than 357 million units of XRP to “public investors in the market”. The agency seeks disgorgement based on the sales, including those sales made on digital asset trading platforms located outside the United States.

The letter states that, according to the law, disgorgement applies only to domestic sales of securities and the sales of XRP were “overwhelmingly made on digital asset trading platforms outside the United States”.

“The SEC’s failure to allege domestic offers and sales should be fatal to its claims for the reasons set out in the motion to dismiss.”

Brad Garlinghouse, Chief Executive Officer at Ripple and one of the two individual defendants in the lawsuit, seems to be planning to use the documents provided by Binance as proof that most sales of XRP formally took place outside the United States, the only jurisdiction that matters for the SEC.

These documents will be used to fight damage claims as the agency has no jurisdiction over the sales of securities outside the country. Whether XRP is a security or not is a different matter, which is yet to be answered in court or Congress.

In the meantime, the Securities and Exchange Commission has added a new trial lawyer to its team, attorney Pascal Guerrier. It seems that news settled a discussion among two prominent lawyers over the chances of an early settlement.

Attorney Jeremy Hogan argued a settlement was around the corner. He made his case based on a string of events – which he called “strange things” – that have been taking place since June and even led him to suspect the deposition of ex-SEC Director William Hinman on July 27 didn’t even happen.

Attorney James K. Filan saw things differently: “I don’t think there are any indications that either party will go quietly into the night, whether it’s on Howey, aiding and abetting or the fair notice defense.”

Read this next

Institutional FX

PrimeXM reports lower volumes for July as summer lull bites

PrimeXM has reported weaker trading volumes for July 2022, in line with other institutional and retail platforms that saw the activity of their clients dropped compared to a month earlier.

Retail FX

FCA warns of ATFX Global Trading / ATFXcoin

In its latest clampdown against the specific type of ‘clone fraud’, the Financial Conduct Authority (FCA) has warned local investors to watch out for a company called ATFX Global Trading / ATFXcoin.

Digital Assets

CME Group to roll out options on Ether futures next month

Derivatives exchange CME Group is set to roll out options on Ether futures on September 12 in a move to bring another level of diversification to cryptocurrency traders.

Industry News, Podcasts

Finance Feeds launches Podcasts: Listen to Ep. #1 feat. Dmitri Galinov of 24 Exchange

The team at Finance Feeds are happy to announce the launch of our Podcast series, available on Spotify and other audio services and hosted by our Editor-in-Chief Nikolai Isayev.

Digital Assets

Madfish launches Yupana.Finance, the first lending protocol on Tezos

Yupana, which aims to provide a similar experience to Aave or Compound, currently supports TEZ, cTEZ, kUSD, tzBTC, uUSD, and uBTC.

Industry News

SEC charges barred broker Anthony J. Mastroianni with $1.2m fraud targeting elderly

Instead of using investor monies to generate income, Mastroianni withdrew over $486,000 of investors’ money from his firm’s bank account and used ill-gotten funds for personal expenses on luxury items, the SEC alleged. 

Digital Assets

Unizen names crypto veteran Michael Healy as chief strategy officer

CeDeFi exchange Unizen has onboarded crypto industry veteran Michael Healy, who originally worked for Wikileaks and built their android application in 2010, as Chief Strategy Officer.

Institutional FX

Sterling Trading Tech adds FX and Crypto to risk and margin system

The Risk-as-a-Service solution provides supports FX spot, forward, and swap trades and positions, in any currency pair, as well as Crypto including crypto priced in any currency.

Interviews, Metaverse Gaming NFT

Exclusive: Wayne Marcel explains FIO Protocol amid fight against fraud on NFT markets

It’s been 12 years since Satoshi Nakamoto released the white paper that introduced Bitcoin to the world.

<