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Ripple’s own lawyers investigated by the SEC

Photo of: Joseph Stone
by Joseph Stone

Are there any doubts within Ripple about the legal status of XRP? The courts are keeping this matter secret.

The legal debates between the U.S. securities regulator and Ripple Labs are still in their infancy. The actions are still focused at this stage on requests for internal information.

The latest request is from the SEC. The authority wanted the company to disclose its legal advice regarding the status of XRP’s massive sales. The SEC believes that this is a securities offering.

Were Ripple’s lawyers also warning the company about this? If so, the SEC wants to know, considering that this will help its own argument.

However, there is no way the XRP issuer would share such evidence. “Ripple asserts that the communications requested by the SEC are protected by the attorney-client privilege, which has not been waived,” reports the judge, Sarah Netburn.

And so the court agrees with the defender in refusing to require Ripple to produce these legal documents. For one Hogan & Hogan law expert, this decision is significant in this case.

Jeremy Hogan calls it “very significant”. The reason? The “judge says that Ripple’s subjective beliefs [about XRP] are NOT relevant to the Fair Notice defense.” As a result, it blocks “the path the SEC wanted to take to fight the defense. “

A previous demand by Ripple had been more successful. The judge in April ordered the SEC to reveal its own secrets. The justice ordered it to disclose its internal documents justifying their status as cryptocurrencies to Bitcoin and Ether.

“The SEC, however, announced that sales of two similar digital assets – bitcoin and ether – did not constitute securities offerings,” Ripple executives complained. What is the basis for this decision?

The company is hoping to get evidence to establish similarities between XRP, Bitcoin and Ether. This will strengthen its defense that the token is a digital currency.

However, Ripple will not have access to all of the Commission’s content. The judge’s order concerns documents such as minutes of meetings and internal memos. On the other hand, emails from SEC members are excluded.