Access to SEC Documents Will Aid Ripple's Defense

The latest court ruling may have tilted the case in favor of Ripple.

Shutterstock photo by Billion Photos

Key Takeaways

  • Judge Netburn has ordered the SEC to provide all official documents that express the agency's views on Bitcoin and Ether.
  • The documents will consist of memos, transcripts, and communications that discuss Bitcoin and Ether's security status.
  • These documents are legally referred to as "discovery documents" and may help Ripple's defense against the SEC.

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The judge presiding over the SEC’s case against Ripple has ordered the regulator to share documents. Those documents will reveal the SEC’s stance on which cryptocurrencies are considered securities.

Ripple Gains Access to SEC Docs

In December 2020, the U.S. Securities and Exchange Commission (SEC) filed a legal complaint alleging that Ripple and its executives raised over $1.3 billion by selling XRP as unregistered securities.

In an update to the ongoing lawsuit, U.S. Magistrate Judge Sarah Netburn ruled that the SEC must share all official documents that express the regulator’s views on why other digital assets like Bitcoin (BTC) and Ether (ETH) are not securities.

These documents are legally referred to as “discovery documents” and consist of memos, transcripts, and other third-party communications that discuss Bitcoin and Ether’s security status.

Documents Could Support Defense

According to legal experts, the latest court ruling on discovery documents may have given an edge to Ripple. This is because access to SEC documents may help strengthen its defense against the allegations.

Jeremy Hogan, Attorney at HoganLegal, reasoned that access to SEC documents would benefit Ripple’s “fair notice” defense. This particular defense argues that the SEC failed to notify Ripple that its actions violated the law before it took legal action.

In other words, the documents may be used to argue that the SEC itself was unsure about the legal status of XRP for several years and further establish Ripple’s innocence over the legality of XRP sales.

SEC on the other hand has filed a motion to strike Ripple’s Fair Notice defense that is due on April 22, 2021.

Disclaimer: The author did not hold the cryptocurrency mentioned in this article at the time of press.

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