SEC defends itself against Ripple application: XRP responds with price rally

The XRP course outperforms the ranks of the other top coins on April 27th. Meanwhile, the SEC does not want Ripple to see any communications with foreign countries.

Is XRP a digital “ripple stock” or not? This question has preoccupied the US District Court for the Southern District of New York (NYSD) since the end of 2020. The US Securities and Exchange Commission is firmly convinced that XRP fulfills the function of a security (security). The authority alleged that Ripple failed to register XRP as such and illegally offered it to US private investors. The Californian FinTech argues against it that XRP exists as an independent digital asset on the XRP ledger. In that case, there have already been many twists and turns that have often been reflected in the XRP course.

It was only in mid-April that Ripple achieved two milestones on the way to discontinuing the proceedings. The NYSD had banned the SEC from viewing the private finances of Defendants Brad Garlinghouse (Ripple CEO) and Chris Larsen (Co-Founder). At the same time, the court asked the authorities to make their internal communications via Bitcoin and Ethereum visible.

According to Ripple’s defense, the US Securities and Exchange Commission (SEC) also didn’t get there in time warnedthat XRP transactions are against the law and are to be regarded as investment contracts.

The SEC last made this line of reasoning rejected.

The implications of Ripple’s defense – that in order to prosecute violations of securities laws, the SEC must expressly state the unlawfulness of certain conduct prior to filing the lawsuit – turns the legal system on its head, and the due process clause [Klausel der angemessen Behandlung] does not require such a result.

SEC does not want to be looked at in the cards

Now the SEC’s Ripple lawyers want to keep a close eye on the fingers: Has the authority possibly carried out investigations abroad in the run-up to the lawsuit that were not covered by applicable law? To find out, the RIB lawyers wrote an April 16 letter requesting access to any communications between the SEC and foreign regulators. In the letter to the responsible judge it says:

In particular, the defendants learned – not from the SEC, as would be required under the Federal Rules of Civil Procedure, but from third party business contacts abroad – that the SEC is making the disclosure completely outside the scope of the Federal Rules and the Hague Convention by improperly exploits memoranda of understanding (“MOU”) with foreign supervisory authorities, which then, at the request of the SEC, submit incriminating document inquiries to companies that are subject to the foreign jurisdiction of the foreign supervisory authority.

The SEC responded a week later on the advance:

The SEC has already agreed to provide Defendants with (1) all documents it received from third parties and made available to the SEC as a result of the inquiries, and (2) a list of the categories of documents that the SEC received from each foreign agency has requested to make available,

the SEC wrote in a letter to Judge Netburn dated April 23.

While this adequately reflects fairness, meeting Ripple’s requirement to disclose communications with foreign regulators could have “far-reaching negative effects” on cross-border SEC investigations, the agency argued.

XRP course takes off

A look at the XRP course currently does not reveal anything about the hard bandages that are put on in the Ripple case. On the contrary, at press time, XRP is trading at $ 1.44. With a 24-hour plus of a whopping 21 percent, XRP is one of the top performers on April 27th. The monthly balance sheet could also give the impression that the dispute with the SEC is already off the table. Here, XRP can boast a growth of 163 percent. Whether this trend will solidify depends largely on further developments in the legal dispute. The last word rests with Judge Sarah Netburn – and it can be a long time coming.