Can the SEC clarify how it assesses XRP to be a security in the Ripple case?
As reported by AZCoin News, the U.S. Securities and Exchange Commission (SEC) has objected to a request by Ripple and its co-founder Chris Larsen to answer interrogation questions regarding the agency’s adoption of the Howey test to confirm the status of XRP.
SEC opposes Ripple request relating to the controversial Howey test
The SEC recently objected to Ripple’s request to disclose employee crypto holdings to produce documentation regarding trading preclearance decisions.
On September 1st, the blockchain giant and Christian Larsen filed a Letter requesting permission to file a Combined Letter Motion regarding an unidentified discovery dispute. They have reached an impasse with the SEC.
Source: James K. Filan
Attorney James added that defendants Ripple and Larsen file Motion to Compel the SEC to answer interrogatories identifying the SEC’s theory of how the Howey Test applies to virtually all Defendants’ transactions in XRP over the last eight years. They argue that the SEC has vague and ambiguous answers about using the Howey test to XRP transactions.
It is unknown where the story will go after this request. Because, at this point, the SEC has filed its opposition to answer interrogatories identifying its theory of how the Howey Test applies to virtually all of Defendants’ transactions in XRP over the last eight years.
The focus of the lawsuit between the SEC and Ripple is to determine whether XRP-related transactions constitute the investment contracts. And this method is related to the so-called Howey test.
“An investment contract exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others,” the agency rules stated.
The agency, while opposing the request to provide further clarification. After a series of consecutive days of filing protests from the SEC and Ripple, the agency voiced a complaint and objected to the request for more clarification.
“Defendants waited until the end of fact discovery, more than seven weeks after receiving the SEC’s first interrogatory responses, to inform the SEC they considered the responses deficient,” they added. “Defendants’ argument here boils down to a complaint that they do not like the answers they received to the interrogatories at issue, in large part because the SEC’s and Defendants’ interpretation of the applicable law differs.”
However, US Court judge Sarah Netburn explained that they appropriately answered Ripple’s questions, adding that “the SEC is not required to answer the interrogatories in a way that adopts the Defendants’ incorrect reading of the law.”
- Ripple Belatedly Agreed To The SEC’s Request To Produce Its Internal Recordings
- The SEC Filed An Objection To Motion To Seal Documents With Recording Of Various Ripple Meetings