Denied: Ripple’s request for documents on SEC’s ‘trading policies governing digital assets’
In what seems like an apparent win for the United States Securities and Exchange Commission [SEC], Ripple‘s request for documents detailing the watchdogs’ “trading policies governing digital assets” has been denied by Judge Sarah Netburn.
As per the ruling provided by attorney James K. Filan, the US magistrate judge declined to grant the defendants access to documents that would prove whether SEC employees were carrying out transactions in Bitcoin, Ether, or XRP, as it was more likely to “cause confusion” than provide any relevant findings.
The regulator had previously been ordered by the court to present its crypto trading policies, leading to the revelation that none existed at the time that it began investigating Ripple. The crypto firm in turn contended that when its representatives had met with the SEC counsel last month, the latter had stated that since formal investigation against Ripple began in 2019, SEC employees were barred from trading in XRP.
Although, any formal documentary evidence backing up this claim is yet to be produced by the regulator despite being compelled by the court, according to Ripple’s claims. Additionally, Judge Netburn’s analysis in the denied motion summarized the firm’s request as,
“Defendants argue that individual trading decisions will, at a minimum, expose the lack of
clarity regarding XRP’s status and whether the SEC believed XRP to be a security. Such
evidence arguably would undermine the SEC’s allegations that the Individual Defendants acted recklessly and would bolster the Defendants’ fair notice defense.”
However, Netburn does not believe such an argument to be pertinent to the case, as the motion added that,
“Defendants have not shown that such individual trading decisions bear on the issues in this case. Although the SEC’s policies (or absence of policies) may provide relevant evidence related to fair notice or recklessness, how an Ethics Counsel viewed a trading decision is more likely to cause confusion or create collateral litigation disputes.”
In addition to this, Netburn also noted that SEC employees’ financial conduct disclosures are protected under the Privacy Act, and Ripple is yet to provide proof that suspending these statutory protections would make a material difference to the case.
In his tweet regarding the recent decision, Attorney, James K. Filan, also noted that,
“The Court directed the SEC to provide Defendants any documentation supporting SEC counsel’s statement during the August 25, 2021 meet and confer that, after the formal order of investigation was issued as to Ripple on March 9, 2019, SEC employees could no longer trade XRP.”
While the SEC’s individual trading records might be out of bounds for Ripple now, this recent motion reaffirmed that the watchdog still has to provide documentation that would prove its claims that agency employees were barred from trading XRP in 2019. Even as this fight has been won by the SEC, the war between the two is far from being over.
This article was first written on yusmid.com