Ripple is demanding that the SEC employees' XRP holdings be made public.

Ripple recently filed a motion to compel the US Securities and Exchange Commission [SEC] to provide its procedures and information surrounding its employees trading in cryptocurrencies such as Bitcoin, Ethereum, and XRP. Ripple's fair notice defense will be strengthened by this move.

Ripple wants the SEC to give, according to attorney James K. Filan's filing.

“...anonymized papers representing trading preclearance decisions for XRP, bitcoin, and ether, or alternatively, aggregated information.”

In addition, the motion filing mentioned records linked to SEC staffers' XRP holdings.

“Defendants also want certifications of SEC workers' XRP holdings, either with identifiable information redacted or in aggregate form. On July 8, July 15, August 18, and August 25, we met and spoke with the SEC on this subject, but no progress was made.”

Ripple's prior demands were met with the "SEC's unwillingness to release crucial material" critical to the defendants' understanding of the SEC's policy on digital assets, including whether or not the SEC allowed its own employees to trade the disputed digital asset, XRP.

The court had previously allowed Ripple's motion to compel the SEC to reveal its digital asset trading policies in June. Following that, the SEC issued a policy titled "Ethics Guidance Regarding Digital Assets" on January 19, 2018. The SEC did not view digital assets as securities until January 19, 2018, according to Ripple, therefore its workers were “free to buy, sell, and keep XRP without any restrictions from the SEC.”

The defendants further stated in the above-mentioned document that,

“This evidence strongly supports the Defendants' defenses in this case and refutes the SEC's assertions. The fact that the SEC did not prohibit its own employees from selling or buying XRP, despite its long-standing prohibition on employees engaging in securities transactions without preclearance, indicates that the SEC had not concluded, prior to at least January 2018, that sales and offers of XRP were securities transactions.”

Furthermore, despite the fact that the SEC maintained a "Prohibited Holdings" list of assets that are subject to the SEC's securities trading embargo, BTC, ETH, and XRP were never included on this list. The SEC's "Watch List," which identifies assets that are subject to case-by-case reviews rather than blanket prohibitions, only added XRP after April 13, 2018.

“Any SEC employee transactions in XRP after April 13, 2018, were examined on a case-by-case basis – again through the preclearance process,” according to the statement. The SEC, according to Ripple, has refused to give this essential material in the case and is now attempting to compel it through the courts.

The SEC has until September 3rd to respond to this motion, according to the court. But what if the SEC refuses to cooperate once more?

As one Twitter user pointed out in response to Filan's tweet,

“The SEC has complete discretion over whether or not to comply with the court's order. After a certain amount of time has passed, the judge will impose sanctions against them. If the SEC continues to ignore the ruling, the case may be dismissed.”

The crypto industry is waiting for the fact discovery deadline on August 31st, as Ripple and the SEC continue their back-and-forth. Furthermore, the litigation appears to be far from being resolved, as the court has already granted the parties' combined request to postpone the depositions of Ripple's CEO and Founder, Brad Garlinghouse, and Chris Larsen.


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