The judicial duel between society Ripple behind the XRP token and the United States Security Exchange Commission (SEC), experienced a new turning point on May 31, 2021. Ripple thus accounts for a new victory with the rejection of the judge in charge of the request for the DRY access XRP legal documents. But the battle is far from won.
A round won for Ripple in his standoff against the SEC
In the context of the trial against Ripple, the US Security & Exchange Commission had previously addressed to the justice of the peace Sarah netburn a demand. The latter consisted of ordering Ripple to provide XRP sales compliance legal advice files federal securities laws.
According to the agency’s claims, the legal action of Ripple amounting to US $ 1.3 billion is based on his understanding of the legal status of XRP cryptocurrency. The fact that the blockchain firm has not stopped deny since the start of the trial in December.
By this maneuver, The DRY wanted access to the legal concerns of Ripple regarding XRP. Alas, according to a public record, the judge Sarah netburn denied the SEC’s petition. Indeed, Ripple affirms “That communications requested by the SEC are protected by solicitor-client privilege, which has not been waived”. On the other hand, this rejection has benefited the company well indeed, it strengthens its defense of fair notification.
The latter based on the argument that the SEC failed to warn the company and other market participants of the unregistered security status of the cryptocurrency XRP. Jeremy hogan, a lawyer closely following the case, considers the judge’s decision Netburn as being “Very important”. According to one of the judge’s statements, Ripple’s subjective beliefs regarding XRP are irrelevant to the fair notification defense. It turns out that this option “Would block the road the SEC wanted to take to fight the defense”.
An important victory, but a trial far from over
The judge Netburn has taken care to clarify that its decision only applies to this specific issue. She claims that “The Court takes no position on whether the defense raised by Ripple is known or whether it will prove to be meritorious.” For John Deaton, lawyer and community leader of XRP holders, the SEC was unlikely to obtain the legal advice note from Ripple. It could have been the other way around, however, as long as the crypto payment company didn’t share it with others.
According to Deaton, although the judge’s decision Netburn means legal defeat for the SEC, this is still not enough to force the latter to capitulate. In addition, Deaton agreed with a statement from a community member who suggested that this decision shows that the judge does not believe the argument put forward by the SEC.
With this turn of events, the SEC is going to have to consider other strategies to prevail. Despite the loss of this round, the parties involved still show no signs of reaching a settlement.
The comments and opinions expressed in this article are those of the author alone, and should not be considered as investment advice. Do your own research before making any investment decisions.