Ripple opposes SEC’s request to avoid responding to RFAs
The SEC v. Ripple Labs case is showing no signs of ending anytime soon. Industry professionals are eagerly awaiting the verdict of the lawsuit, especially since the same could have far-reaching implications.
In what is the latest development in the same, Ripple has opposed the SEC’s request for a telephonic conference to seek a protective order relieving it from any obligation to respond to the Requests for Admission [RFA].
The update was first shared by Attorney James K. Filan. It stated,
“The RFAs concern critical facts that Defendants believe are not genuinely disputed; truthful admissions by the SEC will therefore significantly narrow the issues for trial.”
The defendants in their filing also expressed surprise over the SEC’s arguments that the RFAs are “unduly burdensome.” The defendants called it “triply wrong” and went on to explain,
“First, as a matter of law, “the large number of requests to admit is not in itself a basis for a protective order.” Gen. Elec. Co. v. Prince, 2007 WL 86940, at *2 (S.D.N.Y.Jan. 10, 2007). Second, as a matter of fact, Defendants’ instructions will likely require the SEC to respond to only a fraction of these RFAs, as described in greater detail below.”
According to Ripple Labs, the volume of the RFAs is proportional to the needs of the case and is mainly driven by the SEC’s litigation theories.
In fact, the firm also went on to argue why each of the three sets of RFAs bears on important issues in the case. Especially one where the SEC mentioned a crypto-exchange that sought legal advice over XRP and got the answer that “XRP was not likely to be considered an investment contract.”
“… when one cryptocurrency exchange decided to list XRP, it obtained legal advice that XRP was not likely to be considered an investment contract under existing law, shared that analysis with the SEC, and met with the SEC to discuss the legal status of XRP.”
“As we understand it, not once during those discussions did the SEC indicate that XRP was an investment contract,” it added.
Ripple is seeking details about what the SEC said and did during those meetings. This will further support its fair notice defense and the Individual defendants’ scienter defenses.
Ripple also urged the court to deny the SEC’s motion and direct regulators to reply within 30 days. However, no decision has been taken yet by the court.
The XRP community was cheering recently after U.S. District Judge Analisa Torres gave XRP token holders the status of amici curiae or “friend of the court.” The holders of XRP cannot be direct participants in the lawsuit, however.