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SEC Wins Right to Access Information Overseas Against Ripple

2 mins
Updated by Ana Alexandre
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In Brief

  • Judge Sarah Netburn rules in the SEC’s favor.
  • Multilateral Memorandum of Understanding allows the SEC the information.
  • No evidence suggested the SEC was trying to "intimidate" Ripple.
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The Securities and Exchange Commission (SEC) has won the right for foreign assistance in the ongoing battle against Ripple. Earlier, the technology company was trying to block the government body from getting further regulatory information from overseas.

The blockchain start-up is currently battling a lawsuit from the SEC for allegedly conducting an illegal securities offering. Ripple co-founder Christian Larsen and CEO Brad Garlinghouse were charged with conducting an illegal securities offering.

The motion had been made to deny Ripple’s request for an order requiring the plaintiffs to “stop using foreign requests for assistance for discovery purposes and […] turn over all material already collected.” 

Now, Judge Sarah Netburn has ruled in favor of the SEC and stopped Ripple’s request in its tracks. The request commanded the SEC to cease reaching out to regulators from other countries to gain knowledge on Ripple’s XRP transactions and that Ripple must produce all obtained documents.

The SEC contacted foreign regulators to know if transactions made through overseas accounts were changing the price of the XRP token.

The technology company argued that the SEC must cease its contact with outside regulators, because the move was not in line with the Hague Convention. Ripple also argued that the SEC was using intimidation tactics by reaching out to foreign regulators, but Judge Netburn did not believe this allegation was based on evidence.

“The Defendants argue that use of the Requests is improper because (i) they operate outside of the scope of the Federal Rules of Civil Procedure, letters rogatory, and Hague Convention processes for obtaining foreign discovery, and (ii) their effect is to intimidate or harass the Defendants’ foreign business partners. No evidence suggests that the SEC issued its Requests in bad faith. As such, the Court examines the first point only,” Netburn said in her verdict.

“The Court concludes that the SEC’s use of the Requests is permissible and not an affront to the Court’s jurisdiction,” the document further read.

In a recently submitted memorandum of law in reply to Plaintiff, Securities and Exchange Commission’s opposition of Proposed Intervenors’ Motion to Intervene, XRP holders said that the existing parties did not adequately represent their interest.

They claimed that the SEC was using “red herrings, personal attacks, and irrelevant case law to distract the court from XRP holders’ meritorious request for intervention.”


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Nicholas McGregor
After studying journalism at Rhodes University, Nicholas worked as a financial reporter and analyst, covering a broad range of topics from logistics, to renewable energy, to ICT....