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Ripple filed Opposition to the SEC’s Motion to Compel Ripple to produce relevant Slack communications

According to an update from the lawyer who closely follows the lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC), James K. Filan, Ripple has filed its Opposition to the SEC’s Motion to Compel Ripple to search for and produce relevant Slack communications. In it, the lawyers representing Ripple said that SEC’s request for more than one million Slack messages is burdensome and highly disproportionate.

Ripple slams SEC for demanding 1 million Slack messages

Ripple filed a Motion to Seal exhibits attached to the SEC’s Motion regarding Slack communications and to Seal exhibits attached to Ripple’s opposition to the SEC’s Motion. The parties currently do not agree on what should be sealed.

ripple-filed-opposition-to-the-secs-motion-to-compel-ripple-to-produce-relevant-slack-communications

Source: James K. Filan/Twitter

Because of this, Ripple argued that the SEC’s offer should be rejected.

“Other courts that have considered similar discovery requests for Slack data have ruled that Slack discovery is uniquely burdensome and costly and have ruled against motions to compel their production in cases where the moving party has already obtained significant discovery”, Ripple points to the fact that several other courts have denied similar discovery requests.

As AZCoin News reported, the SEC claims that the missing Slack messages are relevant to the case as they will help refresh the memories of witnesses who are unable to recall critical facts during recent depositions Therefore, the SEC wants Ripple to search through more than a million Slack messages left by its employees in order to obtain critical evidence. However, Ripple asserts that the documents are neither critical nor uniquely relevant.

SEC also mentions the fact that the company Slack messages have a low responsiveness rate given that Ripple produced only 1,468 Slack documents out of the 115,000 documents it initially reviewed.

In June, the court approved the SEC’s request to extend the pre-trial discovery phase until October 15. Ripple warned that forcing it to collect additional Slack data would further alter the current scheduling order.

Ripple estimates that it will take up to 15 weeks to just retrieve the messages. In addition, the Ripple team will also have to consider them. Furthermore, the reason for not being able to collect direct messages and instant messages of many parties was due to a mistake discovered at the end of July, but the company claimed that it then promptly started collecting the necessary data.

Particularly, the conversations that the regulator has seen touch upon Ripple’s desire to create speculative XRP trading, the company’s concerns about the XRP price, the impact of XRP sales on Ripple’s business as well as the cryptocurrency’s regulatory status.

In another development, the cryptocurrency community is very happy because Empower Oversight files FOIA requests seeking information on conflicts of interest in cryptocurrency at the SEC.

For your information, Empower Oversight Whistleblowers & Research (“Empower Oversight”) is a nonpartisan, nonprofit educational organization dedicated to enhancing independent oversight of government and corporate wrongdoing.

ripple-filed-opposition-to-the-secs-motion-to-compel-ripple-to-produce-relevant-slack-communications

Source: Empower Oversight

From May 2017 to December 2020, senior SEC official William Hinman reportedly participated in the SEC’s regulation of cryptocurrencies while receiving millions of dollars from his former employer, the law firm Simpson Thacher. Simpson Thacher is a part of the Enterprise Ethereum Alliance, an industry organization whose objective is to drive the use of Enterprise Ethereum. Hinman, while in his capacity at the SEC, declared that the Ethereum cryptocurrency, Ether, was not a security, causing its value to rise significantly.

Later, the SEC sued one of Ethereum’s competitors, Ripple, declaring its cryptocurrency, XRP, was security. Shortly thereafter, XRP’s value plummeted 25%. After Hinman left the SEC in December of 2020, he returned to Simpson Thacher as a partner. The leader of the SEC division that brought the XRP lawsuit, Marc Berger, similarly left the SEC for Simpson Thacher.

Additionally, there are potential concerns regarding former SEC Chairman Jay Clayton’s handling of cryptocurrency issues at SEC. As with Hinman and Ether, while at the SEC, Clayton declared that Bitcoin wasn’t a security, and its value rose. The SEC’s lawsuit against Ripple was filed at the end of Mr. Clayton’s tenure at the commission. Once he left the SEC, Clayton joined One River Asset Management, a cryptocurrency hedge fund exclusively focused on Bitcoin and Ether.

All of this suggests that the SEC needs a clearer explanation. And we will have regulatory clarity sooner than later.

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