US SEC Compels Evidence Submission Against Ripple
The legal tussle between XRP’s parent company, Ripple and the US Securities and Exchange Commission is likely to drag on beyond this year. In a new development, the US SEC pleaded the court to compel Ripple to submit recordings of meetings held with staff members. This comes on the heels of a new discovery made by the regulator.
According to reports, the US SEC has discovered new evidence prompting its plea to the court presided over by Judge Sarah Netburn. Earlier this month and in one of its depositions on a key Ripple employee, the US regulator chanced upon a new report that Ripple had both audio and video recordings of meetings convened with employees.
US SEC Accuses Ripple of Concealing Relevant Information
The US regulator has also alleged that all the recordings were hoarded from it despite forwarding a letter back in January, requesting the submissions of recordings that were relevant to the case. However, not only that this request was ignored, but the defendant (US SEC) touched upon the issue of Ripple keeping mum over the recordings.
In an August 4th deposition conducted by the US SEC, erstwhile Chief Compliance Officer of Ripple, Antoinette O’Gorman informed the court for the first time that the crypto firm frequently kept track of meetings through audio and video recordings. Following this revelation, the US SEC sought corroboration of the evidence presented by the CCO from Ripple. The latter acknowledged the authenticity of the evidence and added that it hid the recordings from the US SEC.
Ripple Resolves to Deliver Recordings Under Stringent Terms
However, the request of the US regulatory body was met with stiff conditions, in which Ripple noted that it would only honor the request if the US SEC waives its right to compel the submission of any other recording it discovers in the future, especially during the depositions of co-founders Brad Garlinghouse and Christian Larsen scheduled to hold in September. In addition, the condition would apply to additional documents submitted by Ripple itself or any of the individual defendants in the suit.
The regulator quickly refused to accede to the conditions, quoting the FRCP 26(b)(1), which obliges any of the parties, whether defense or claim, to acquire information that may be helpful to the case.
Spanning months after the first notice of the lawsuit back in November 2020, the controversy between both parties continues to drag on. The crux of the suit is that Ripple had sold unregistered securities worth billions of dollars to the public without recourse to the US SEC.
Reports have indicated that September is likely to witness the end of the case with victory tilting towards the side of Ripple in view of past judgments and the recently proposed infrastructure bill. With the recent back and forth between both parties, the suit may extend beyond next month.
The prolonged suit reveals the active efforts being made globally to regulate cryptocurrencies with a view to protecting investors and eliminating bad actors.
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