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While ideas of a settlement have just recently gathered traction, the truth remains that the SEC’s case against Ripple Labs is a long way from being resolved. The fact that there is a huge development to report every other day demonstrates this. In the most recent such development, the US Securities and Exchange Commission has now submitted its reply letter in support of its omnibus discovery motion, which was filed on May 25.
The SEC had asked the court in the letter to enable it to “notice six additional depositions,” as well as to compel Ripple to furnish information relating to post-complaint XRP transactions and lobbying activities.
The agency has now doubled down on its aforementioned requests, with its latest support letter asserting,
“This additional discovery is critical to the SEC’s claims and Defendants’ defenses, is not duplicative, and is reasonable given the scope of this contentiously litigated securities case.”
According to the regulatory agency, Ripple’s contention that the SEC’s long, ongoing investigation should count against it is foreclosed by ample authority, with the plaintiff adding that the “additional burden of this discovery is outweighed by the clear benefits.”
While the aforementioned arguments are intended to augment the SEC’s omnibus discovery motion, they may also be interpreted as the SEC’s answer to Ripple’s resistance. The defendants had indicated in their own brief that such a request was “unjustifiable” and reflected the agency “changing its tune.”
Even in response to the SEC’s request for records of post-complaint XRP transactions, the defendants argued that doing so would be “overly burdensome” and “would not yield relevant information.”
However, “Ripple would prefer to litigate whether XRP as currently distributed by Ripple is a security,” according to the SEC. This, along with the fact that the firm’s specialists have left open the potential of relying on post-complaint XRP data, makes such a request both timely and pertinent. The agency went on to say,
“Ripple’s attempt to have its cake and eat it too is fundamentally unfair.”
Finally, with regard to the blockchain firm’s lobbying operations, the SEC argued that Ripple cannot deny that it paid significant persons to make remarks targeted at convincing the market that XRP is not a security. Such efforts, according to the agency, strike at the core of the defendants’ case, especially as they demonstrate,
“… contrary to assertions, Ripple was not confused as to what the SEC thought of Ripple’s offers and sales of XRP and fought desperately to avoid the result it knew was coming.”