Technology

Judge denies SEC access to Ripple legal communications

U.S. Magistrate Judge Sarah Netburn denied the Securities and Exchange Commission (SEC) access to Ripple Labs legal communications.

In a recent United States District Court memo, the memo indicates that Justice Netburn denied the SEC access to Ripple Labs communication memos.

The document states that the SEC had sought an order to access “all communications constituting, transmitting or discussing any legal advice sought or received by Ripple as to whether its offers and sales of XRP were or would be subject to federal laws on securities ”.

The memo ends by saying “the motion is denied”.

The judgment comes less than a month after the SEC filed the lawsuit against Ripple. Ripple Labs had also previously added former U.S. Treasurer Rosie Rios to its board, while adding Director of FinTech Kristina Campbell to the team as CFO.

Questions raised against the judgment

In the memo, Justice Netburn added several points to the SEC’s reason for denial. These included solicitor-client privilege. Netburn reiterated that solicitor-client privilege should be “strictly confined to the narrowest possible limits, in accordance with the logic of its principle”.

Another issue raised in relation to the SEC’s claim is solicitor-client privilege. The note recalls that “the parties do not dispute that the information sought by the SEC falls within the privilege”.

Further, Ripple Labs claims that its “fair notice” defense was that there was a “lack of clarity and fair notice regarding defendants’ obligations under the law.”

Ripple Labs also said the eight-year delay in pursuing enforcement action against the company following more than 200 exchange listings and billions of dollars in XRP sales transactions was another concern.

Finally, Ripple Labs also explained that a certain exchange had previously sought advice on whether XRP was considered a security prior to listing.

The SEC did not say it viewed XRP as security and said the exchange listed the cryptocurrency.

Ripple takes another victory against the SEC

The memo continues with several other points supporting Ripple Labs. The conclusion states that “the SEC’s motion is DENIED.”

The latest blow to the SEC is another victory for Ripple Labs which has been battling the SEC for months.

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