The court orders SEC to produce internal policies governing employees’ trading in, which never states XRP is a security
Judge Netburn ordered the U.S. Securities and Exchange Commission (SEC) to produce internal policies governing purchase employees’ trading in, or sale of digital assets. This is what the SEC has refused to do until now.
Is this a big blow to the SEC?
A week ago, as AZCoin News reported, the SEC was also dealt a major blow after judge Sarah Netburn commented that Ripple Lab’s fair notice defense centered not on the defendants’ behavior or knowledge, but the SEC’s activities. Now, while the above news is another small victory for Ripple, in this case it looks like there could be more, especially since the Court has now ruled on Ripple’s 4 June Letter Motion.
Accordingly, the presiding judge has now ordered the SEC to produce documentation regarding its internal policies that govern the purchases and sales of digital assets by employees. Previously, the management agency had refused to comply with the defendant’s request for irrefutable reasons.
The “text-only” order passed by Judge Netburn stated:
“The Court finds that the information sought meets the low bar for relevance, including potentially with respect to the claims against the individual defendants.”
Since the aforementioned order was “text-only,”, Judge Netburn did not disclose his legal reasoning behind making such a request. After this news, people reacted quite quickly and clearly. Including Attorney John Deaton-founded CryptoLaw with the statement as below.
(3/3) Netburn is, therefore, ordering @SEC_Enforcement to stop stonewalling and hand over “policies governing SEC employees’ trading in, or purchase or sale of, Digital Assets and/or Virtual Currencies, including all changes and updates to those policies” to the Defendants.
— CryptoLaw (@CryptoLawUS) June 23, 2021
Attorney Jeremy Hogan also had a few words to say: “Let’s think about a best-case scenario here for the SEC: It has internal trading policies but the policies NEVER state that it regards XRP as a security. Once that determination was made internally by the SEC, wouldn’t it have made sense to inform employees? Makes sense to me!”
So, what’s the worst-case scenario for the SEC then? XRP not being listed in the SEC’s internal policies as one of the assets being evaluated by it and the agency’s employees not being warned against it would be one.
While the aforementioned ruling is a major one, Judge Netburn only granted the defendants’ 4 June motion in part. The judge ordered the SEC to produce the aforementioned docs, she also denied the defendants’ first and third requests pertaining to the SEC’s electronic FinHub mailbox and production of OIEA external communications.
- XRP Is Considered Centralized But Is It True? Ripple Director Insists The Company Is Not Manipulating The Network
- Crypto Mom Hester Peirce: A Cryptocurrency Doesn’t Necessarily Have To Be A Security If Its Issuer Gets Sued By The Agency