SEC v. Ripple: Ripple refuses to deliver sensitive documents and tells Judge why
“The SEC’s disproportionate request is also unreasonably duplicative of Ripple’s extensive production of over one million pages of discovery—including emails, documents, text messages, and responsive Slack messages for 33 custodians.”
The SEC v. Ripple lawsuit is likely to present regular updates throughout the rest of the month up until August 31, the deadline for the fact discovery (lawsuit agenda).
The Court will be forced to rule on privilege issues as the parties don’t see eye to eye on that matter, with the SEC nearly all of its internal documents regarding XRP and ETH to be kept from the Defendants’ hands.
Yesterday, Ripple formally opposed the SEC’s motion to compel the Defendants to deliver terabytes of Slack communications.
“The SEC’s extraordinary demand calls for an extensive and costly fishing expedition that would likely take months to complete and come at very significant cost. The SEC’s disproportionate request is also unreasonably duplicative of Ripple’s extensive production of over one million pages of discovery—including emails, documents, text messages, and responsive Slack messages for 33 custodians”, said the letter.
“The SEC’s Letter-Motion downplays the substantial discovery the SEC has already received fromRipple as well as the reasonable offer of compromise that Ripple made to produce additional Slack messages from nine custodians that—unlike the SEC’s proposal— focuses on more significant custodians with high Slack usage levels. Ripple has already begun its review and production of that data, recognizing the upcoming close of fact discovery. Yet, the SEC rejected Ripple’s reasonable offer and instead decided to seek additional Slack data from custodians who were not deponents or likely trial witnesses or were not frequent users of Slack. Accordingly, the SEC’s motion should be denied and Defendants’ compromise position should be adopted by the Court”.
Ripple also filed a motion to seal exhibits attached to the SEC’s motion and its own opposition to the SEC’s motion so that its Slack communications remain confidential for its “sensitive business information”.
Today, the SEC will respond to Ripple’s motion for a discovery conference regarding the SEC’s improper assertion of the deliberative process privilege, and any motion to seal exhibits filed with that motion.
Attorney Jeremy Hogan has recently analyzed each counsel strategies for the SEC v. Ripple lawsuit, with the SEC aiming to attack from the flank and claim Ripple marketed XRP as a security, therefore the company and the individual defendants conducted an unregistered securities offering.
SEC’s Commissioner Peirce – who has been publicly stating there is currently no regulatory clarity for the crypto asset space – has recently said in an interview that an asset doesn’t have to be a security in order to be sued by the SEC.
Still, Peirce’s admission of lack of clarity can still be a “gift from the heavens” for Ripple as its main defense is that there was no fair notice.
In the meantime, Congress is stepping up and discussing amendments that could bring clarity to the ecosystem. The bill proposal, however, seems to indicate that XRP would not be subject to the SEC, according to attorney Thien-Vu Hogan.