Ripple’s legal battle with the United States Securities and Exchange Commission (SEC) has been stretching on for months now. The financial watchdog accuses the blockchain company of conducting an illegal securities offering because it believes XRP is a security. However, Ripple might finally be seeing light across the end of the tunnel as it can now dig through the SEC’s internal discussion on crypto for mention of XRP.
According to Law360, Ripple Labs have been granted access to the SEC’s documents “expressing the agency’s interpretation or views” on crypto assets, by U.S. Magistrate Judge Sarah Netburn. The Judge granted the motion “in large part,” after determining that the SEC’s memos concerning crypto are likely discoverable. It was asserted that staff-to-staff email communications do not need to be produced.
Netburn has also allowed both parties to raise disputes with the ruling.
Matthew Solomon, Ripple CEO Brad Garlinghouse’s counsel, believes this is “game over” for the SEC’s $1.3 billion lawsuit if they are able to discover that the SEC has concluded XRP is similar to that of BTC or Ether, noting the SEC’s regulatory purview does not extend beyond securities.
Also because the SEC has taken more than eight years to file this complaint, the firm’s legal team believes it can undermine the SEC’s claims in case the regulator produces documents that contradict the regulator’s past classification of XRP.
“We need this discovery to defend ourselves,” Solomon stated.
Meanwhile, SEC counsel argues that “The actions of the promoter” is what needs to be in focus at the moment, criticizing the defendants for putting the commission “on trial” by scrutinizing its internal deliberations, rather than defending its allegedly illegal token sale.
Lot of eyes
The Judge also went on to note that the hearing saw massive public interest as more than 500 individuals dialed in through a public phone number to observe the case.
One of the observers of this case, attorney Jeremy Hogan, tweeted on April 6 that back in 2016, a cease-and-desist order aimed at a then-advisor to Ripple Labs addressed the blockchain company as a “digital currency company.”
“The SEC must now explain to the Court how a ‘digital currency’ transformed to a ‘digital security,’” he noted.