The US Securities and Exchange Commission (SEC) and blockchain payments firm Ripple’s legal battle continues, with the regulator requesting additional access to Ripple’s internal communications. On Monday, the SEC filed a motion in the Southern District of New York, requesting Judge Sarah Netbrun to order Ripple to produce and submit its employee messaging on business communications, Ripple executives’ attorney James Filan announced on Twitter.The SEC believes that Ripple only collected a small portion of its Slack messages and that a “massive quantity” of Slack data has not been collected. The firm eventually admitted that this was caused by a “data processing mistake” after “repeatedly contending that its Slack production was complete.”
“Ripple’s data error and refusal to produce the majority of documents has already resulted in significant negative consequences for the SEC.
Among other things, the SEC deposed 11 Ripple witnesses based on incomplete records of their communications, according to the filing.
A total of over 1 million messages containing “terabytes of data” and outpacing Ripple’s large email productions, according to the SEC, which supports testimony that Ripple employees communicated at least as frequently through Slack as they did through email.
Prior Ripple Slack messages “have yielded critically important information,” according to the authority, which was not included in the firm’s previously provided email and other document sets.
The company then filed a request with the SEC to extend the deadline for responding to the SEC’s motion regarding the Slack communications from Thursday, August 12, to Monday, August 16. The request was granted.
Attorney Jeremy Hogan, a popular lawyer within the XRP community, suggested that the SEC’s latest motion is yet another effort to prove that XRP should be treated as a security and thus fall under the commission’s jurisdiction. “It is attacking from the flank and arguing Ripple marketed and treated XRP like a security and therefore it is. The SEC has had some success with this argument in the past and it makes sense as a strategy since in all substantive ways XRP is NOT like a security,” Hogan noted.
Gary Gensler, the chairman of the Securities and Exchange Commission, called for increased regulation in order to adopt rules for decentralized cryptocurrency exchanges last week.
In response, former Commodity Futures Trading Commission Chair Christopher Giancarlo asserted that crypto regulation does not fall under the jurisdiction of the SEC because cryptocurrencies are commodities rather than financial instruments.