The SEC v. Ripple case is moving the markets, the law, the blockchain space, and the trading industry. Here’s a quick recap.
The last week of August is upon us. As professionals within the trading industry return from their summer holidays, it is time to review what happened in the SEC v. Ripple lawsuit and related events ahead of a key date: 31 August.
As we head toward the end of fact discovery and both parties continue to scramble over gaining access to much relevant evidence to support their key arguments, we give you the most important titles in August.
“Well, I’ll say it: I swear Judge Netburn is following some of the XRP people on Twitter or maybe even on Youtube. I didn’t think so before but now… I see you Judge Netburn”, said attorney Jeremy Hogan.
“This is absolutely basic information essential to the defense”, the letter continued. “Rule 33 requires the SEC to answer each interrogatory “separately and fully,” and in a manner that is as “specific as possible and not evasive” […] in order to ‘minimize uncertainty concerning the scope of [the SEC’s] claims, said counsel Matt Solomon on behalf of Ripple and Chris Larsen.
FinanceFeeds covered the telephone conference live. After confronting SEC’s counsel Jorge Tenreiro in regard to the subjectiveness or objectiveness of the claim of “recklessness”, the Judge ordered an in-camera review of the SEC’s internal documents.
“Ripple never informed the SEC that Ripple routinely recorded staff meetings until a key former Ripple employee testified to that in her deposition earlier this month”.
Attorney Jeremy Hogan explains the SEC’s gambit – strengthening its “XRP is a security” position in exchange for a weaker “fair notice” argument – is at stake on the 31 August hearing. A key date for the XRP lawsuit.
New Motion to Compel aims to expose the SEC’s policies governing digital assets and their employees’ trading of XRP, ETH, and BTC. It may support Ripple’s fair notice defense.
Fact discovery has been extended to accommodate the depositions of Brad Garlinghouse and Chris Larsen. Expert discovery has been extended by 13 days with its deadline now being scheduled for November 12.
In 2019, SEC’s Amy Starr and Coinbase’s Dorothy DeWitt made comments that are now considered critical evidence for Ripple’s Fair Notice defense and whether XRP is a security or not.
The SEC has been criticized for not listening to investors nor protecting their interests when it comes to its aggressive “regulation-by-enforcement” tactics.
Both parties have requested the court to extend the deadline in order to schedule the depositions of the individual defendants in mid-September.
The pending privilege dispute is likely to be resolved in August 31 after a telephone conference.
“Mr. Hinman’s personal views as to XRP’s status are dubious, in any event, given his testimony that not all of the factors laid out in Howey need to be met to be an investment contract.”
The ex-SEC Chair has joined one more digital asset firm even though he is being investigated precisely for potential conflict of interest in his handling of Ripple’s XRP.
The William Hinman deposition did provide ‘bombshells’, as many were expecting, and are likely to be used in Ripple’s case that the SEC failed to provide proper fair notice.
The SEC opposed Ripple’s refusal of handing over the Slack messages arguing there is plenty of time to gather the terabytes of documents since “there is no realistic prospect that the parties will fully resolve this case for several months, if not longer”.
Ripple counsel Matthew Solomon confronted the SEC for deleting a relevant portion of Hinman’s deposition. The answer was found on the metadata and recovered.
Two can play that game. After months of frustration for the SEC’s refusal of delivering internal documents regarding the agency’s views on ETH, XRP, and BTC, the defendant is refusing to hand over ‘terabytes’ of internal Slack messages which the plaintiff argues will prove the firm marketed XRP as a security.
Washington D.C. non-profit Empower Oversight, which is led by renowned whistleblower specialists, has submitted a FOIA request to the SEC seeking communications between SEC officials and their current and former employers.
Ex-SEC Chair Jay Clayton and Ex-SEC Commissioner William Hinman are the main targets.
What is the reasoning of behind each party’s motions as they look to obtain documents to use as evidence? Evidence to support what arguments? Attorney Jeremy Hogan offers his views.
The fact discovery deadline is 31 August. Besides the pending delivery of critical evidence for both parties, there is an extensive list of rulings yet to be made, including the XRP Holders’ motion to intervene.