Ripple claims ‘big win’ in SEC case

Ripple Labs has prevailed against the SEC in its ongoing securities fraud case after the judge overseeing the case denied the SEC’s motion to review certain documents that may not be material to the prosecution.

Ripple Labs has dealt a blow to its case against the U.S. Securities and Exchange Commission (SEC) following the presiding judge’s ruling, which a Ripple community lawyer called “a very big win for Ripple.”

The SEC filed a lawsuit against Ripple and its executives Brad Garlinghouse and Christian Larsen in 2020, alleging the sale of unregistered securities.

Presiding Judge Sarah Netburn rejected the SEC’s request to reconsider its request to use the privilege to block documents related to a June 2018 speech by then-Ripple director Willian Hinman, in which Hinman said Bitcoin (BTC) and Ethereum (ETH) were not securities.

The SEC previously did not object to documents that were not protected by the Deliberative Process Privilege (DPP) because it showed they only concerned Hinman’s personal views and not Ripple’s strategy.

The DPP is exempt from government disclosure of certain documents in cases so it can review existing policies in secret based on the material.

The SEC subsequently reversed course, arguing that the speech reflected Ripple’s strategy, not Hinman’s personal views, and should be blocked.

Judge Netburn said the SEC should not contradict itself by attempting to overturn its assertion. In her decision, she wrote:

"The SEC is trying to have it both ways, but either the speech is meant to reflect institutional strategy or it isn't. The SEC insists it reflects Hinman's personal views and can't now deny its position."

Summarizing the key aspects of Judge Netburn’s refusal to reconsider, Ripple community defense attorney James K. Filan tweeted today:

Another Ripple community lawyer and founder of Crypto-Law.us also tweeted to his 191,000 followers today that the “SEC is now in the emergency room” following Judge Netburn’s ruling.

Despite this seemingly important ruling, the case is not over yet, and the SEC now has two weeks to appeal the decision.

While the ruling appears significant, the case is not over yet, and the SEC now has two weeks to appeal the decision.

Many in the crypto industry are watching the case as its outcome could portend the future of SEC filings against crypto companies that sell unregistered securities.

A win for Ripple could see the SEC step back from aggressive litigation against the cryptocurrency industry. However, if the SEC prevails, the floodgates could open, with cryptocurrency-savvy lawyers having a ready-made industry ready for them.