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January 20, 2022

Ripple vs. SEC Lawsuit: Case Coming to An End

Ripple has won a tiny victory in its over-a-year-long legal battle with the Securities and Exchange Commission (SEC). Ripple has been granted access to emails within the SEC by a federal judge, which they hope will aid their case.

Ripple recently won a significant legal battle with the Securities and Exchange Commission. This came after U.S. Magistrate Judge Sarah Netburn determined that emails relating to a speech given by a high-ranking member of the commission on Ethereum in 2018 were ineligible for Deliberative Process Privilege protection.

A speech delivered at the time by William Hinman, then Director of the SEC’s Division of Corporate Finance, revealed to attendees at a Yahoo Finance Crypto Summit that Ethereum, like Ripple’s XRP, was not a security. He went on to say that the token was quite decentralized.

The speech has become a source of dispute in a year-long court battle in which the SEC claims Ripple and its co-founders knew XRP was a security that needed to be registered with the SEC but sold it anyway without following proper protocol.

Ripple’s staff has attempted to expose the reasoning behind the regulatory body’s decision that Ethereum is not a security, in the aim of exposing contradictions in the complaint against them and proving that XRP is not a security as well.

The judge’s judgment encompasses documents produced by Valerie Szczepanik, the SEC’s Head of Innovation and Financial Technology, describing various internal SEC conversations and mail sent between Hinman and other SEC officials discussing the preparation of the now-controversial speech.

Judge Sarah Netburn stated in her judgement that the details in the documents did not reveal any key links in the deliberation processes and, as a result, could not be protected by privilege.

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The ruling is a direct outcome of the Ripple team’s perseverance in pursuing this judgment for several months, despite the fact that it is a minor milestone. Ripple’s attitude has been diametrically opposite to what has appeared to be the norm for many who have faced similar charges from the SEC. Instead of settling out of court, the team chose to take the SEC on in court.