Ripple Labs started a court battle with the United States Securities and Exchange Commission (SEC) on 22nd December 2021 over an accusation that the blockchain payment firm offered an unregistered security in the form of its digital token XRP for relatively seven years.
On 6th April 2021, the digital payment firm won a discovery ruling that will force the SEC to provide the internal documents that define Bitcoin and Ethereum as digital currencies rather than securities.
This will soon give the general public access to the SEC’s secret about the regulatory status of cryptocurrencies.
On 15th March, Ripple Labs filed a motion in conjunction with its co-defendants CEO Brad Garlinghouse and co-founder Chris Larsen, to compel the SEC to produce documents in relation to its communications about Bitcoin and Ethereum or its internal communications about XRP.
The filing on 15th March to US District Court Judge, Sarah Netburn, reads in part as follows:
“For almost a decade, the SEC watched as XRP grew and developed, all the while issuing no formal guidance that its sales may be illegal. The SEC did, however, announce that sales of two similar digital assets — bitcoin and ether — were not securities offerings.”
The SEC, through public comments from former Chairman Jay Clayton and former Director of Enforcement William Hinman, declared that the two largest cryptocurrencies, Bitcoin and Ethereum, are not securities. But there is no formal guidance provided to explain how they arrive at such a conclusion.
During the hearing, Judge Netburn said “I’m going to grant, in large part, the defendants’ motion.” The Judge included documents such as meeting minutes and internal memos as part of the order, but not internal staff emails.
As expected, the SEC argued against the discovery motion, claiming that the actions of the promoter (Ripple) should be the major focus of the case.
Meanwhile, the digital currency XRP has been riding on this positive news to print new yearly highs. Some hours ago, it was reported that the cryptocurrency surpassed $1 for the first since 2018. At the time of press, XRP is trading at $1.10, with a 25.59% price upsurge in the last 24 hours.