Ripple received another favorable ruling in its legal battle against the Securities and Exchange Commission (SEC) as Judge Sarah Netburn recently denied the US financial markets regulator access to the blockchain firm’s legal communications.
The regulator filed a motion at the beginning of this month seeking access to ‘all communications constituting, transmitting, or discussing any legal advice Ripple sought or received as to whether its offers and sales of XRP were or would be subject to federal securities laws’.
Ripple challenged the motion saying that the SEC’s requested communications are protected by the attorney-client privilege, which has not been waived. However, the SEC countered that the California-based company put its attorney advice at issue by asserting a fair notice defense and that the regulator is entitled to ‘test and rebut this defense’.
“The motion is DENIED,” the judge wrote in a memo published on Sunday.
Further, Judge Netburn elaborated that the attorney-client privilege should be ‘strictly confined within the narrowest possible limits consistent with the logic of its principle’.
Meanwhile, legal experts are considering this recent ruling extremely important for Ripple that is a standing firm in legal defense.
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Judge DENIES the SEC’s motion to compel production of Ripple’s lawyer opinion letters. Very important because the Judge states Ripple’s subjective beliefs re XRP are NOT relevant to the Fair Notice defense, blocking the road the SEC wanted to use to fight the Defense. https://t.co/MHsx569BmO
— Jeremy Hogan (@attorneyjeremy1) May 30, 2021
Small Wins for Ripple
The US financial markets regulator dragged Ripple to court last December, accusing the company of selling unregistered securities XRP and raising around $1.3 billion. This turned out to be the biggest crypto-related litigation given the size and penetration of Ripple.
Furthermore, the SEC also tried to gain access to the personal finances of Ripple CEO, Brad Garlinghouse and Executive Chairman, Chris Larsen, but failed. Earlier, Ripple received access to SEC’s internal communications to see if the regulator previously saw XRP similar to Bitcoin and Ether, neither of which are facing any legal troubles in the US.
Despite the high-profile lawsuit, the blockchain company is optimistic, and the executives are planning to take Ripple public after its settlement with the SEC.