Ripple Fights SEC: Lawyers of the Fintech company opposed the Securities and Exchange Commissions motion to compel Ripple to provide Slack business communications. The SEC made the request to Judge Sarah Netbrun to order the company to produce all employee messages on the business communication platform Slack. The company opposed the motion, saying it was “troublesome and disproportionate”.
It has been estimated that there are over 1 Million messages comprising many Terabytes of data, likely many times more messages than the company’s official email accounts have sent.
The company’s lawyers say the request is onerous, and will both increase the duration of the lawsuit, as well as massively increase costs, and cited examples from previous courts where motions to produce internal messaging correspondence have been denied.
However, counsel for the SEC hope that the messages will help jog the memory of witnesses who have stated under interview that they did not remember certain events of the period. The court had previously accepted the regulators request to extend the period for discovery and deposition, and gave the SEC until 15th October 2021 to collect more evidence to support their case.
Ripple fights SEC Lawsuit on multiple fronts
The SEC’s lawsuit against Ripple alleges that the company was selling unregistered securities, with CEO Brad Garlinghouse selling more than 350 Million XRP tokens across a number of crypto trading platforms. On August 2nd, Garlinghouse’s lawyers requested documents which may pertain to the lawsuit from Binance, and in June they filed an application requesting documents from non-US-based cryptocurrency exchanges such as Bitstamp, Huobi, and Upbit.
Ripple’s legal team has argued that as only domestic (USA) sales and securities offerings can be considered illegal sales of XRP under Section Five of the Securities Act of 1933, the majority of Garlinghouse’s XRP sales were made on exchanges outside of US jurisdiction.
Ripple also argues that the SEC cannot require regulation of XRP as a security as the digital asset it is a medium of exchange which is used in both international and domestic transactions.
Earlier this year, SEC Commissioner Hester Pierce said that Ripple may not actually be a security after all, but it may well have been sold as one.