- A U.S judge has granted the SEC’s request to extend the discovery deadline for a further 60 days in what Ripple has in the past termed as an existential threat.
- Elsewhere, Garlinghouse and Larsen filed a reply in further support of their motion to compel the SEC to turn over internal BTC, ETH and XRP documents, FinHub emails and more.
In the ongoing Ripple vs. the U.S Securities and Exchange Commission legal battle, the regulator has gained an upper hand after a U.S federal judge granted its request to extend the discovery deadline. The SEC now has until August 31 to conduct fast discovery, with expert discovery being pushed until October 15 in what will be a big blow to Ripple.
An existential threat to Ripple
The SEC first asked for the discovery deadline extension earlier this month. At the time, the SEC revealed that it had already conducted two depositions and witness interviews. However, it would need more time to conduct the remaining eight. In addition, it sought a court order to depose six more witnesses. The extension would further allow the watchdog to Ripple’s documents regarding the depositions.
It stated:
It is neither fair nor efficient to cut off the SEC’s opportunity to fully develop the factual record in this case, involving years of conduct and billions of dollars of XRP sales, especially when the SEC has made its best efforts to meet all existing deadlines.
Ripple replied shortly after, disputing the request “because the delay will be extremely prejudicial to Ripple and because there is not good cause to modify the discovery schedule.”
The San Francisco company further noted in its reply that the extension would pose “an existential threat to its operations in the U.S.” Ripple claimed that with the SEC extending the deadline, it would continue to lose ground in its on-demand liquidity (ODL) service, hurting its business greatly.
However, as Ripple’s lawyer James Filan revealed on Twitter, Judge Analisa Torres of the Southern District of New York has sided with the SEC. According to Filan, it’s however possible that the judge extended the deadline to have enough time to work through the substantive motions.
#xrpcommmunity #SEC_NEWS v. #Ripple #XRP BREAKING. THE SEC’s REQUEST TO EXTEND DISCOVERY DEADLINE IS GRANTED. pic.twitter.com/DipS32P473
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) June 14, 2021
Ripple files reply to compel the SEC to hand over internal documents
Elsewhere, Ripple and its two executives – CEO Brad Garlinghouse and chairman Chris Larsen – have filed a reply in further support of their motion to compel the SEC to turn over internal documents regarding Bitcoin, Ethereum and XRP.
In their reply, they discredited the SEC’s arguments that its internal documents weren’t relevant to the proceedings.
The SEC’s own trading policies are likely to show – for example – that the SEC did not consider XRP and other digital assets like XRP to be securities, or that the SEC considered XRP to be substantially similar to other digital assets(like Bitcoin) that it has expressly stated are not securities.
It added:
It is also evidence that is critical for the Individual Defendants’ defenses against the SEC’s allegations of recklessness, which has an objective component.
#XRPCommunity #SEC_NEWS v. #Ripple #XRP Ripple files reply in further support of its Motion to Compel the SEC to turn over internal BTC, ETH and XRP documents, FinHub emails and OEIA documents. pic.twitter.com/k6aTCRPEAR
— James K. Filan 🇺🇸🇮🇪 (@FilanLaw) June 14, 2021
The SEC had argued that its internal trading policies were not publicly known and could not have been known to Ripple and its executives.
“But that is irrelevant: as a matter of law, all that matters is whether these policies could provide relevant evidence of whether the individual defendants were objectively reckless or whether there was a reasonable interpretation of the statute consistent of the individual defendants’ conduct,” Ripple argues.
