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XRP Lawsuit: SEC files letter brief, reinstating it’s stance in DPP dispute

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The latest update in the XRP lawsuit saw the plaintiff file a Letter Brief in the DPP dispute, supporting the allegedly privileged data it is keeping from Ripple. The SEC asserted that all documents that will be reviewed by Judge Netburn, in-camera are “pre-decisional and deliberative”, and henceforth protected by the Deliberative Process Privilege (DPP). Furthermore, the SEC claims that these documents are also protected by the attorney-client privilege and the work product doctrine.

The SEC has also argued that compelling production of internal and inter-agency documents, that were formerly protected by DPP will cast down the genuine consultation efforts from the SEC employees.

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“The compelled release of the SEC’s pre-decisional deliberations relating to digital assets would discourage meaningful deliberation among SEC officials and staff relating to investigations, potential cases, and other regulatory activities taken or under Consideration in a field where regulation carries significant consequences for the financial markets.”

SEC argues that documents are “informal intra-agency communications”

The SEC stated that on May 6, the Court ordered production of non-Privileged external communications about Bitcoin, Ether, and XRP, along with internal “memoranda or formal position papers” discussing the three tokens. However, the plaintiff emphasized that the Court had agreed that production of “informal intra-agency communications, such as emails…need not be searched or logged.”

Yet, post-Ripple’s motion to compel discovery in the DPP dispute, the court order the SEC to produce in-camera, the documents listed under seal. The SEC objected that these documents are in fact SEC internal documents and communications with other law enforcement agencies.

SEC claims documents are “non-responsive”

The SEC has reinstated its ‘irrelevance’ stance, arguing that most compelled documents are non-responsive, and are not required to be searched in the case. The SEC also claimed that it logged these documents in good faith to avoid further litigation on certain categories of documents, including SEC officials’ notes of external meetings or drafts of Director Bill Hinman’s June 2018 speech. However, the SEC would continue to support its stance that these documents are not responsive to the Court’s orders.

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“But the majority of the intra-agency documents logged by the SEC constitute internal SEC communications, notes, and drafts that are not responsive to this Court’s orders: they are the very “intra-Agency communications” that “need not be searched or logged” because they are not “intra-agency memoranda or formal position papers.”

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Ripple CEO reinstates SEC bias towards ETH, claiming XRP could’ve been No.2

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It is not news that the ongoing XRP lawsuit has got the better of Ripple’s XRP token. Ripple CEO, Brad Garlinghouse recently questioned the SEC’s bias towards Ethereum, claiming that XRP would’ve been at the No. 2 position instead of ETH if it weren’t for the commission’s partial crackdown. Garlinghouse spoke at the DC Fintech Week virtual conference yesterday, arguing that the U.S. Securities and Exchange Commission alleged Ripple’s XRP as unregistered security while granting Ethereum a regulatory free pass, which in turn helped ETH shoot through the roof.

“Within the last few years, XRP was the second most valuable digital asset. As it became clear the SEC had given a hall pass to ETH, ETH obviously has kind of exploded and that clarity has helped.”

XRP secured the position of the second-largest crypto asset by market capitalization during the latter half of 2017. However, the token has dropped down to seventh place while Ethereum stands strong as No. 2. Furthermore, Garlinghouse claims that the SEC’s exclusively aggressive anti-crypto stance to allegedly protect the consumers is in fact anti-investors. Referring to the XRP lawsuit, Ripple CEO emphasizes that “nearly 50,000 U.S. people who hold XRP who are trying to sue the SEC for ‘protecting them’”.

XRP Holders left with bearish and frozen funds

Earlier this week, Attorney Deaton Filed a Letter Motion on behalf of the XRP Holders (Movants) that contended SEC’s extension request, with the main argument concerning the XRP holders’ frozen funds because of the consistent postponement of the lawsuit’s final verdict. During the ongoing bull run, XRP remains considerably bear because of the regulatory crackdown on Ripple. However, the court has overlooked the community’s concern and granted the extension explaining that in lieu of pending motions, extra time will only facilitate both parties to complete pending fact discovery and thoroughly prepare for upcoming expert depositions.

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“The lack of liquidity within the United States, coupled with the mass de-listings prevents XRP Holders from trading, selling, transferring, or converting their XRP. It is because of this de facto in place seizure of their property that XRP Holders took the extraordinary step to seek intervention as defendants… Any delay in the underlying action marks yet another day XRP Holders do not have access to their funds.”, wrote Deaton.

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XRP Lawsuit: Court Grants Two Motions for both parties each. Here’s how it’s a win-win for Ripple?

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The latest update in the XRP lawsuit explains the need for the formerly granted extension. Judge Netburn partially granted two motions, one for both parties. First, the Defendants’ Motion to Compel the SEC to produce interrogatories responses, regarding SEC’s Howey Test blanket application theory. Second, the Plaintiff’s Motion seeking a protective order under FRCP 26(c)(1), relieving the plaintiff of any obligation to respond to the 29,947 requests for admission (RFAs). Judge Netburn explains that the discovery sought in both motions overlap in certain respects, and therefore these applications are resolved together.

Court grants majority motions from the Interrogatories Dispute

Judge Netburn specified that the parties’ conflict over the application of Howey and its progeny do not render Ripple’s interrogatory improper and therefore has ordered the SEC to answer Ripple’s interrogatory No.2, identifying the specific terms of the “investment contract” from XRP sales, along with Interrogatories 11, i.e., Ripple’s move to compel the SEC to state whether it contends that “efforts by Ripple were necessary to effect any increase in the price of XRP.”

Followed by Interrogatories 1 & 11, the Court also granted Ripple Interrogatory No. 6, i.e., the defendants move to compel the SEC to state whether it contends that “Bitcoin and/or Ether are securities within the meaning of Section 2 of the 1933 Securities Exchange Act.”. Furthermore, Judge Netburn granted most of the Defendants’ motions to compel answers on other interrogatories, except Defendants’ motion regarding Larsen Interrogatory No. 5 on when XRPL was fully functional. The judge denied it without prejudice for being “too vague”.

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SEC “irrelevance” argument discarded, while “burdensome” stance gets protection from Court

In the RFAs dispute, where the SEC sought a protective order, Judge Netburn has ordered the SEC to answer most of the RFAs while granting protection from one. Specifically, the Court has discarded SEC’s “irrelevance” argument in the case. The court Orders the SEC to produce responses for the Fourth Set requests, seeking to authenticate documents for admissibility under Rule 36(a)(1)(B) that regards the use of RFAs to establish the authenticity or genuineness of a document.

Furthermore, Judge Netburn denies SEC’s “irrelevant” contention to the Fourth Set of Requests regarding Defendants’ “fair notice” argument. The judge stated that disputes over interpretations of law are not a proper objection to a request for admission. Additionally, the court suggested the responding party either admit or deny the statement presented. The court orders the SEC to make a “reasonable inquiry” to secure such information “as are readily obtainable”, further denying the motion for a protective order to the Fourth Set of requests.

However, the court granted a protective order to the SEC for the Sixth Set of Requests regarding the disputed issue of whether Defendants’ sales of XRP constitute “investment contracts” under Howey, where the Defendants required the SEC to consider over 1,500 contracts and answer 13 preliminary questions. The Judge writes “it is hard to view this stunt as anything more than Theatre” to Defendants’ extensive 28,849 RFAs and granting protection to the plaintiff on burden grounds.

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Once Ripple Settles Its Case, XRP and Crypto Market Will Take Off, David Gokhshtein Says, Here’s Why

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Crypto influencer Gokhshtein reckons that as soon as the Ripple-SEC case is settled, the whole crypto market is going to benefit, not just XRP

Head of PAC Protocol and Gokhshtein Media, crypto influencer David Gokhshtein, has taken to Twitter to share his take on the potential positive outcome of the Ripple-SEC case.

As soon as it is settled, he reckons, XRP and the whole crypto market will take off.

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The reason for that, according to him, is the fact that the SEC will finally provide some clarity regarding crypto. This was a condition on which Ripple chief Brad Garlinghouse would agree to settle with the SEC, according to his recent interview. In particular, he wants to have “absolute certainty about XRP.” He warned his readers that the tweet was not financial advice.

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