The US Securities and Exchange Commission (SEC) suffered a major setback as Magistrate Judge Sarah Netburn granted Ripple’s appeal to serve subpoenas and authenticate videos of public remarks made by the regulatory agency’s officials.
The payment giant is set to serve two subpoenas to at least seven SEC officials. The Judge presiding over the high-profile case Netburn snubbed the SEC’s claim that the defendants were trying to reopen fact discovery.
The Lawsuit Drags On
The legal battle between the SEC and Ripple shows no signs of slowing down anytime soon. The SEC slapped the blockchain tech firm and two of its senior execs with a lawsuit in December 2020. The financial regulator had accused them of trading $1.3 billion worth of XRP tokens as securities without the registration of the assets.
However, things have moved south for the SEC. The details of the latest win for Ripple were revealed by well-known lawyer James Filan. The agency had earlier objected to Ripple’s request of authenticating videos and instead put on a condition that it would consent to the request only if the defendants agreed to reopen discovery. The goal behind SEC’s move was to serve several subpoenas so that it can obtain video material that would bolster its own claims.
SEC responded with a one-liner that said,
“Plaintiff respectfully takes no position on Defendants’ motion to reopen fact discovery to serve non-party subpoenas for the purpose of obtaining video recordings for authentication.”
While the judge ultimately dismissed SEC’s condition, many Ripple proponents were irked by its response. Filan, for one, asserted that the SEC’s response so far has been “an abuse of the judicial process and a waste of the Court’s time.” He accused that the regulator waited five days to “file a one-sentence response” and even then ended up misconstruing Ripple’s original request.
SEC in Troubled Waters
Lately, the SEC has been at the receiving end of a string of defeats, and the authentication of the remarks made by the officials of the regulator is likely to further strengthen Ripple’s defense against accusations made by the plaintiff.
Despite the case being dragged, Ripple CEO Brad Garlinghouse believes a resolution may be found before the end of the year.