Ripple Suffers Major Blow in Its Case with the SEC

Cryptocurrency News Ripple (XRP)

The case of Ripple Labs with the US Securities and Exchange Commission (SEC) has become one of the most interesting ones to be taking place in the crypto community in 2021. There was another development in the case recently, which is unfortunately a blow for Ripple. This is because a federal judge denied the request of the company to access the crypto trading records of the employees of the SEC. According to Ripple, access to these records would be immensely helpful for the company to prove that the authority did not regard XRP as a security, as it has said in the lawsuit, as some of the commission’s own employees have XRP in their crypto portfolios.

As per the case documents, the motion to get access to these documents was filed by the company on August 27th. Ripple Labs stated that if the record shows that some of the employees of the SEC also had XRP in their portfolio, it would indicate that the commission itself did not have a clear framework that could be used for distinguishing between a cryptocurrency and a security. Ripple also added that proving that some of the SEC’s employees’ ownership of XRP would also be handy in undermining the agency’s case itself. 

However, Sarah Netburn, a federal judge, did not grant Ripple’s motion for a number of reasons. According to the judge, the SEC’s arguments held weight, as they had said that the preclearance decision process doesn’t require any determination of a trade complying with a securities law by the SEC Ethics Counsel. She also said that the SEC did not have a trading policy established regarding cryptocurrencies when they filed the case against Ripple, which means that its employees could not be held accountable for violating any of its policies. 

According to the judge, there wasn’t a legal cause that would push her to grant Ripple’s demands. She also disclosed that the federal privacy regulations and statutes protected the employees of the SEC because the disclosure of specific financial information is forbidden under these. A motion was filed by the SEC for compelling Ripple to grant access to its internal communications. Ripple had argued that it would be a hectic process to produce these records. However, the court ended up ruling in the favor of the SEC and Ripple was told to grant said access. 

The developments in the company’s case with the SEC usually have an impact on the price action of the XRP. Whenever the company wins a motion, the value of its cryptocurrency goes up and the value declines if it loses a motion. But, this time around, it appears that the price of XRP has remained unchanged, despite Ripple losing the motion. After the announcement of the outcome, XRP saw a 0.2% dip in its price in 24 hours, but this wasn’t attributed to the case. Instead, there had been a recession in the broader crypto market, as bitcoin had seen its price drop, which affected other cryptocurrencies as well. 

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