Ripple has scored another win in its ongoing legal battle from the United States Securities and Exchange Commission as the court has denied the SEC access to Ripple’s legal advice.
Magistrate Judge Sarah Netburn of this District Court for the Southern District of New York ruled Sunday to deny the SEC’s motion to compel Ripple to produce memos talking XRP sales with the company’s lawyers.
According to the SEC, Ripple could have been aware that XRP could be a safety from its legal advisors before moving ahead with its own token sale back in 2013. The SEC filed a motion on May 7 to induce Ripple to create all communications talking any legal information Ripple sought or obtained as to if its offers and sales of XRP would be subject to federal securities laws.
In the latest ruling, Netburn referred to the attorney-client privilege that’s supposed to”encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice” The judge noted that Ripple hasn’t waived its attorney-client privilege despite defendants being in a position to waive it in certain circumstances.
The judgment also pays particular attention to the rule of fair notice, which requires the courts to construe ambiguous criminal statutes in favor of the suspect. In asserting this defense, Ripple claims that the SEC failed to provide market participants with fair notice that the regulator believed XRP a security.
“In support, it cites to the SEC’s eight-year delay in pursuing enforcement actions against Ripple for its alleged securities violations — even after XRP was listed on over 200 cryptocurrency markets, billions of XRP sales transactions had occurred, and Ripple had entered a settlement with the U.S. Department of Justice and FinCEN that described XRP as a’convertible digital currency,”’ Netburn wrote.
The judge noted that the SEC may renew its motion application if Ripple”increases its beliefs or relies upon its own privileged communications in aid of its own fair notice defense.”
The latest ruling is still another milestone in the SEC’s struggle against Ripple after the regulator filed a lawsuit against Ripple Labs, CEO Brad Garlinghouse and executive chairman Chris Larsen at December 2020, alleging that XRP was a $1.3-billion unregistered securities offering. Ripple has been able to achieve a series of legal victories, such as winning access to internal SEC discussion background concerning cryptocurrencies in April. The court also denied the SEC the ability to disclose the fiscal documents of Garlinghouse and Larsen.
Last week, Garlinghouse confirmed Ripple’s plans to go public after the company resolves its situation with the SEC, stating that the probability of this scenario was”very high at some stage.”