A federal judge denied Ripple’s motion to access SEC’s employee’s data as the company wanted to have a list of all of the crypto transactions made by the people working for the regulator as we reported in our Ripple news before.
The New York federal Judge denied Ripple’s motion to access SEC’s employees data for the crypto transactions made by the workers at the regulator’s office to prove that the agency didn’t consider XRP to be a security. According to the official transcript, Ripple filed the request on August 27 and their rationale for the request was that if it were discovered that the employees traded XRP it would expose the SEC’s past lack of clarity about the nature of the token and will prove that the SEC didn’t consider XRP to be a security.
Defendants argued that the individual trading decisions will expose the lack of clarity regarding XRP’s status and whether the SEC believed XRP is a security. This evidence will likely undermine the SEC’s allegations that the defendants acted recklessly and will bolster the notice defense. Defendants contended that they are entitled to know whether the SEC permitted the employees to sell, buy or hold XRP as market participants in the relevant period. The judge gave a few reasons.
First, she upholds the relevance of the SEC’s argument that the preclearance decision process doesn’t involve any determination of the SEC Ethics Counsel which a trade complies with the specific securities laws as the SEC Ethics Counsel hasn’t proposed provision expressly relevant to XRP so the trading history is irrelevant for the case. Another key argument for the denial was the lack of legal jurisdiction to approve Rippel’s demands and this rule protects the privacy rights of the SEC employees as US citizens.
The annual certification that Defendants seek, Congress prohibited disclosure of this financial information via federal privacy statutes and regulations to maintain government employees’ privacy. Ripple tried to use a similar argument as the SEC asked for access to Ripple’s internal communication via Slack and argued that producing these documents will be a long and expensive process. The court explained that the SEC had no trading policy regarding digital assets during the period of interest for the lawsuit so the employees didn’t act in violation of the rule even if they traded crypto. XRP didn’t overreact to the news as the market moves in pace with the development of the Ripple-SEC situation with rallies once Ripple scores a win and crashes. Right now, XRP is trading around $0878 down by 5% in the past 24 hours and recovering about 0.5% so far.
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