Ripple lawsuit: SEC claims every document it’s withholding is privileged

"Securities and Exchange Commission Headquarters Building" by Securities and Exchange Commission (licensed under CC BY-NC-SA 2.0)
“Securities and Exchange Commission Headquarters Building” by Securities and Exchange Commission (licensed under CC BY-NC-SA 2.0)

Key Takeaways:

  • The SEC filed a response Ripple’s motion to compel production of internal documents.
  • The financial regulator argued that the deliberative proces privilege applies to the documents requested by Ripple.
  • XRP is moving horizontally after Sept 7’s crash pulled back prices below $1.2

NEW DELHI (CoinChapter.com) — The latest move in the SEC versus Ripple legal battle comes from the plaintiff’s end. The regulator filed a letter brief in the DPP dispute regarding alleged privileged data it is withholding from Ripple. Moreover, the SEC asserted that the documents requested by XRP developers are irrelevant to their defense.

The letter further states only one of the documents requested by Ripple addresses the question relating to whether XRP transactions are securities. It further explained that Entry 2 of Appendix A is an internal SEC employee email and memorandum, protected by DPP, attorney-client privilege, and the work product doctrine.

In detail, DPP, or deliberative process privilege, is a form of executive privilege that protects information detailing the process by which a government agency reached a particular decision or drafted a specific policy. Additionally, the attorney-client privilege protects confidential communications between an attorney and their client.

The work-product doctrine protects written or oral materials prepared in the course of litigation from discovery by the opposite counsel. Judge Sarah Netburn will have an in-camera review of the documents requested by Ripple.

Meanwhile, Ripple’s native token XRP’s prices are holding above $1 support. XRP fell 33% between high to low levels on Sept 7.

What The SEC Letter Says

In its letter, the SEC argued that the production of internal and inter-agency documents that the DPP formerly protected would ‘discourage meaningful deliberation among SEC officials and staff‘ relating to regulatory activities.

Also Read: SEC’s harsh policy on US crypto exchanges echoes in South Korea; regulatory crackdown ahead?

The SEC highlighted that the court ordered the production of non-Privileged external communications along with ‘internal memoranda, or formal position papers,’ discussing Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP). Further, the plaintiff highlighted that the court had agreed that the production of informal, intra-agency communication ‘need not be searched or logged.’.

However, when Ripple filed its motion to compel discovery in the DPP dispute, the court ordered an in-camera production of documents listed under seal. The SEC argued that the requested documents are internal SEC documents and communication records with other law enforcement agencies.

Except for Entry 2—the legal memo about XRP that is protected by all three applicable privileges—none of the documents listed in Appendix A addresses the application of Howey to XRP. And none (other than Entry 2) contains any information about whether it was reasonable to view XRP transactionsas securities transactions

The SEC in its letter

The SEC reiterated that Ripple’s data discovery plea is irrelevant, arguing that most of the compelled documents are unnecessary for the case. The regulator also mentioned it produced these documents in good faith and to avoid further litigation. However, the SEC said it would stand fast on its stance that the documents are not responsive to the Court’s orders.

Ripple Price Charts

Ripple’s native token, XRP, has managed to stay above support at $1.00. The Ripple token began a bull run following its golden cross on August 31. However, Bitcoin’s crash on Sept 7 dragged XRP with it, leading to an 18.77% loss between open to close levels. Since then, the token has been moving horizontally above immediate support.

XRP prices are moving laterally on the daily chart. Source: XRPUSD in Tradingview.com
XRP prices are moving laterally on the daily chart. Source: XRPUSD in Tradingview.com

XRP is bullish across all time horizons as its prices are still above the 50-Day (Purple) and 200-Day (Yellow) Moving Average trendlines. In addition, there is support for XRP near its 200-Day MA line at $0.902. However, if prices were to fall further, XRP may find itself near support at $0.7675, which would cause a loss of 29% from current prices.

Also Read: ETH forms bullish technical setup amid unsuccessful Ethereum attack attempt.

On the other hand, XRP’s upside is hindered by resistance near its 26-Day (Green) Exponential MA line at $1.135. Once bulls breach above it, the next target would be at $1.196. In case of sustained upswing, the resistance at $1.27 will come into effect.

Meanwhile, bars on the MACD histogram are negative for XRP currently, but are decreasing in magnitude. It indicates that the MACD line (difference of 12-Day and 26-Day EMA) is moving upwards towards its signal line (9-Day EMA of MACD).

Bars on MACD histogram are declining for XRP. Source:  XRPUSD in Tradingview.com
Bars on MACD histogram are declining for XRP. Source: XRPUSD in Tradingview.com

Once the histogram bars turn positive, it will indicate bullish momentum for the Ripple token.

The relative strength index for XRP is neutral at a value of 47.92.

At the time of writing, XRP was trading at $1.100, up 0.34% on the day.

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