Despite the Securities and Exchange Commission’s (SEC) refusal to hand over information related to Bitcoin and Ethereum, Ripple has persisted in its pursuit of them.
Attorneys for Ripple sent a letter to Magistrate Judge Sarah Netburn detailing why Bitcoin and Ethereum were relevant in the case. According to the official filing:
“The SEC’s unwillingness to disclose documents relating to bitcoin and ether is based on a misconception of their meaning. XRP, like bitcoin and ether, is one of the most commonly used digital currencies. Bitcoin and ether, according to the SEC, are not securities.”
Furthermore, lawyers for Ripple argued that the court should not just take the SEC’s word for it as it argues that Bitcoin and Ether are unrelated to XRP’s case. Rather, Ripple claims that the SEC’s handling of XRP has led to “widespread marketplace uncertainty.” According to the attorneys:
“Instead, the defendants pursue records that represent how XRP was perceived in the marketplace, either directly or via internal correspondence as a proxy. The SEC cannot deny that it is a hotspot for requests for regulatory guidance on whether or not XRP is a security.”
Ripple has provided over 303,000 pages of documents in the court case, according to several outlets, and it is currently reviewing 75,000 additional documents that the Securities and Exchange Commission has requested. The SEC, on the other hand, has only provided 153 of the documents requested by Ripple, which the blockchain company’s lawyers say is unreasonable.
Attorneys for Ripple made an appeal to Judge Netburn, saying:
“The burden of dealing with Defendants’ requests is hardly uncommon for a critical problem in a case of this magnitude, particularly as compared to the SEC’s discovery requests.”
Many have criticized the SEC for abusing its authority in the Ripple Labs case. Although Bitcoin and Ethereum are excluded from securities laws throughout the United States since they are classified as commodities, Ripple’s XRP cryptocurrency has not received the same care.
The SEC filed a lawsuit against Ripple Labs and its top executives in December 2020, alleging “$.13 billion in unregistered digital asset securities” via the XRP cryptocurrency. The US Securities and Exchange Commission claims that the company’s two top executives each profited $600 million from XRP sales. Furthermore, the agency has questioned whether XRP is genuinely decentralized.
The result of the case between Ripple and the Securities and Exchange Commission (SEC) would certainly be important for the crypto industry, as it will set the precedent for how other cryptocurrencies are controlled in the US.