The US Securities and Exchange Commission (SEC) suffered a major setback when Magistrate Judge Sarah Netburn granted Ripple’s appeal to serve subpoenas and authenticate videos of public comments made by regulatory agency officials.
The payment giant is set to serve two subpoenas on at least seven SEC officials. The judge presiding over the high-profile Netburn case rejected the SEC’s claim that the defendants were trying to reopen fact-finding.
The demand continues
The legal battle between the SEC and Ripple shows no signs of slowing down anytime soon. The SEC slapped the blockchain technology company and two of its top executives with a lawsuit in December 2020. The financial regulator accused them of trading $1.3 billion worth of XRP tokens as securities without registering the assets.
However, things have moved south for the SEC. The details of Ripple’s latest victory were revealed by well-known attorney James Filan. The agency had previously opposed Ripple’s request to authenticate videos, and instead placed the condition that he would consent to the request only if the defendants agreed to reopen the discovery. The goal behind the SEC’s move was to serve multiple subpoenas so that it can obtain video footage that would bolster its own claims.
The SEC responded with a sentence that read:
“Plaintiff respectfully takes no position on Defendants’ motion to reopen fact finding to serve third party subpoenas for the purpose of obtaining video recordings for authentication.”
While the judge ultimately dismissed the SEC’s condition, many Ripple supporters were upset by their response. Filan, on the one hand, he claimed that the SEC’s response so far has been “an abuse of the judicial process and a waste of the Court’s time.” He charged that the regulator waited five days to “file a one-sentence response” and even then ended up misreading Ripple’s original request.
SEC in rough water
Lately, the SEC has received a series of defeats, and the authentication of the comments made by officials of the regulator is likely to further strengthen Ripple’s defense against the accusations made by the plaintiff.
Despite the case dragging on, Ripple CEO Brad Garlinghouse believes a resolution can be found before the end of the year.
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