Lawyers representing Ripple have responded to the U.S. Securities and Exchange Commission (SEC) after it opposed their efforts to determine whether SEC employees were allowed to purchase XRP while simultaneously conducting an investigation of Ripple for securities fraud.
The SEC alleges that Ripple issued XRP as an unregistered security and that the crypto is still in violation.
[adinserter block="1"]In legal filings revealed by lawyer and XRP supporter James K. Filan, Ripple asserts its right to anonymized data as part of the discovery process.
“The SEC’s claim that the motion constitutes an intrusion of privacy for SEC employees ignores that [Ripple does] not seek any particularized information relating to SEC employees, [but] completely anonymized information of a narrow scope.”
Last week, the SEC opposed the “motion to compel the production of confidential details of trading by individual SEC employees… whose personal affairs are not at issue in this case.”
But Ripple’s latest court filing contends,
“That the SEC permitted XRP purchases and sales by its own employees… directly undermines the SEC’s claims that since 2013 [Ripple] acted recklessly… because it was so obvious that XRP was a security that they must have been aware of it.
SEC counsel orally indicated that SEC employees could not trade XRP after the formal order of investigation was issued as to Ripple on March 9, 2019. The SEC [now] refuses to confirm its oral statement in writing… [and] refuses to state how many SEC employees requested and/or received permission to trade XRP after January 2018 … but before March 9, 2019.”
The SEC’s legal team has indicated the regulator eventually did prohibit its employees from trading XRP, but not until March 2019 when it issued a “formal order of investigation” on Ripple.
Ripple’s latest filing implies that the SEC’s allegations may contradict the notion that their own employees were allowed to trade XRP as late as March 2019.
“There is an obvious tension between the SEC’s broad theory in this case – that ‘every offer, sale and distribution of XRP’ by Defendants since 2013 constituted an investment contract and that the Individual Defendants recklessly disregarded the law – and the fact (which we seek to confirm) that the SEC’s own employees were permitted to trade in XRP as late as March 9, 2019, and possibly thereafter.”
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