As the lawsuit between Ripple, a cross-border payments behemoth, and the United States Securities and Exchange Commission (SEC) continues, there have been new developments. The latest emerged during the discovery conference between the two parties.
As reported by U.Today, on 21st May 2021, there was a telephonic conference with Magistrate Judge Sarah Netburn, where Jorge Tenreiro, a senior trial attorney at the U.S. SEC, in his affirmative presentation, argued that Ripple’s lawyers had informed the company that the digital token XRP could be ruled as a currency and at the same time as a security:
“They were sophisticated players. They hired at least 12 law firms…Ripple’s supposed confusion has to be tested against what it was actually being told.”
As it’s earlier reported, the SEC is trying to compel Ripple to make the legal advice it obtained from lawyers regarding the status of the digital asset XRP available.
According to SEC’s attorney, Jorge Tenreiro, the defendants have directly inserted their state of mind in the lawsuit.
Tenreiro also stated that it would be game over for Ripple if it decided not to follow the advice it received from lawyers.
He also accused Ripple of using its legal advice to influence crypto exchanges with the opinions of the lawyers:
“If they received advice and they did not follow, they would lose…What if their lawyer told them, you still have to deal with the SEC? That would be game over for their defense, that they were confused. We don’t know what they have given the exchanges… Ripple tells us, what you were thinking is relevant.”
In response to the SEC’s allegations, Ripple’s lawyer, Gregory Rapawy, disclaimed the point that Ripple used the advice it received as the subject of the defense:
“It doesn’t matter that we believed and believe that XRP is not an investment contract – it’s strict liability. Our defense is fair notice, not on our state of mind.”
Additionally, Gregory Rapawy pointed out that Ripple has no intention to resist the discovery of non-privileged internal documents, adding that the internal documentation of both parties is potentially relevant to the fair notice defense.
According to Judge Netburn, the matter will be given careful consideration and a ruling will be announced as soon as possible.