Ripple was denied access to SEC employees’ crypto trading records and holdings
According to the latest update from the lawyer who closely followed the lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC), James K. Filan, Ripple has been delivered another blow by the court, with the judge denying it access to the agency employees’ crypto trading records and holdings.
Source: James K. Filan
Ripple blocked from seeing SEC employees’ crypto holdings
Judge Sarah Netburn denied Ripple’s request to obtain documentation of the SEC’s explicit decisions regarding crypto trading as well as employees’ personal assets. According to the court, the defendants’ request for documents reflecting the SEC’s trading preclearance decisions with respect to SEC employees’ transactions in BTC, ETH, or XRP, and annual certifications concerning SEC employees’ XRP holdings is denied.
According to the judge, the disclosure of information about crypto holdings by SEC employees was prohibited by Congress in order to protect the privacy of government employees.
“Defendants are not entitled to SEC employees’ annual certifications of XRP purchases, sales, and holdings”, the filing stated.
Ripple intends to obtain annual SEC employee certifications to show the total amount of cryptocurrencies it owns.
The Court directed the SEC to provide Defendants any documentation supporting SEC counsel’s statement during August 25, 2021, meet and confer that, after the formal order of investigation was issued as to Ripple on March 9, 2019, SEC employees could no longer trade XRP.
The defendants argue that individual trading decisions may shed light on the lack of regulatory clarity with regard to digital assets. However, the SEC argued that its employees’ transaction reports were presumably confidential.
In addition, the judge asserted that the regulator’s pre-settlement process is irrelevant to the case as it is not concerned with determining whether a given cryptocurrency is a security. Furthermore, it revealing how the agency’s Ethics Counsel perceived that each individual decision can lead to collateral litigation disputes.
Not only Ripple, but the judge also denied the SEC access to the bank records of Brad Garlinghouse and co-founder Chris Larsen in early April.
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