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Ripple Vs SEC

XRP Lawsuit: Ripple appeals the Court to Disclose SEC’s in-camera review documents

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The latest update in the XRP lawsuit saw Ripple respond to SEC’s letter with the explanation for its privilege assertions along with a redacted version of the three additional documents requested by the defendants for in-camera review. Ripple has requested the court to disclose these documents to the defense and has further continued to argue against the plaintiff’s repetitive “privileged” stance.

Ripple objects to SEC’s entitlement to keeping secrets under DPP

Ripple has contended SEC’s “pre-decisional” or “deliberative” argument for the three additional documents, noting that the commission has failed yet again to identify any specific policy process related to these or other documents, as it is required to when seeking protection under DPP. Ripple argued that the SEC claims against disclosure of discussions are weak and do not stand any legal relevance.

SEC asserts that “how to structure a forum the SEC intends to use to communicate with industry participants” is deliberative or would reveal its “mode of formulating or exercising policy-implicating judgment,”. However, the defense objects to the plaintiff’s assertions’ insufficiency to invoke DPP and states that if this argument is considered valid in the court, then that would extend the invalid privilege to virtually every document or communication in a federal agency.

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“The fundamental problem with the SEC’s approach is that the agency apparently believes that it is entitled to operate in secret, and to withhold from actual litigants, whose reputations and livelihoods are at stake due to its own affirmative litigation choices (as opposed to the general public pursuant to FOIA), any internal documents that relate to its mission, broadly defined. This approach finds no basis in law because it turns on its head Congress’ lawfully enacted presumption of openness in government documents, subject to circumscribed, narrow exceptions.”

While the Court granted Ripple’s September 24 appeal, seeking the addition of three documents by the SEC for in-camera review, it still has not permitted disclosure of mentioned data to the defendants. These documents include the two documents related to the SEC’s meetings with law firms, along the email trail concerning discussions with a third party who received guidance from the SEC to analyze its digital asset under the framework set forth in Hinman’s June 14, 2018, speech.

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Ripple

Ripple vs. SEC Drama Update: Parties Have Three Days Left to Supplement Their Arguments

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Renowned corporate lawyer James Filan shares an order from the U.S. magistrate judge crucial for Ripple case.

Both Ripple Labs Inc. and the U.S. Securities and Exchanges Commission (SEC) should provide additional arguments to supplement their positions in three days.

New legal briefs should be filled before Dec. 8, 2021

According to the scanned copy of a document shared by Attorney Filan, U.S. Magistrate Judge Sarah Netburn has issued an order that asks Ripple Labs Inc. and the U.S. SEC to “simultaneously” file letter briefs.

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The briefs should be filed before Dec. 8, 2021. New papers should supplement the parties’ arguments regarding Ripple’s latest motion to compel.

These supplemental briefings should be filed as Deliberative Process Privilege.

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Mr. Filan’s audience is certain that the obligation to provide new briefs was hotly anticipated and should be interpreted as a small win for Ripple.

“The law change slightly favors the SEC”

At the same time, attorney Jeremy Hogan shares that this extraordinary document (“law change”) favors the position of the Securities and Exchange Commission.

However, commentators should wait for the release of new briefs, Mr. Hogan concludes. He compared the court order to the behavior of a “daddy” who changes his child’s bedtime.

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As covered by U.Today recently, the SEC accuses Ripple Labs Inc. and its key officials, Brad Garlinghouse and Chris Larsen, of offering illegal securities to U.S. citizens in the form of XRP tokens.

This year-long legal battle highlighted many crucial questions regarding crypto regulation in the U.S., such as the status of crypto tokens and securities.

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Ripple Vs SEC

Inside the Ripple vs. SEC saga: Investigation reveals new details of personal interests at the SEC

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  • An investigation by FOX Business has revealed new tie-ups in the SEC vs. Ripple case, including Gensler’s huge role before he joined the SEC.
  • Andreessen Horowitz has also been identified as one of the key players protecting Ethereum and nudging the SEC on which way to regulate the space.

Eleven months ago, almost to the day, the U.S Securities and Exchange Commission (SEC) sued Ripple Labs for violating securities regulations with its sale of the XRP token. It also sued Brad Garlinghouse and Chris Larsen, the CEO and Chairman of the firm respectively, for facilitating this violation and benefitting personally from it. Since then, it’s been a lengthy legal battle that doesn’t seem to be ending soon.

But were the charges motivated by personal interests? Are there higher powers that are protecting the other projects, especially Ethereum? Was Ripple identified as the cheap target of the enforcement despite working extensively with the SEC to prove it had abided by the law? FOX Business believes so, and in its latest investigation, it made out links between Gary Gensler, Bill Hinman, Jay Clayton, Joe Lubin, Andreessen Horowitz and other powerful players that span back to over three years ago.

Jay Clayton

The biggest factor in the saga is Clayton, the former SEC head who in his last act filed the lawsuit against Ripple (literally hours before he left office). Clayton had been a Wall Street lawyer who, as a Republican, advocated for a free market. In fact, in his time at the SEC, most of the 65 new rules he passed were towards deregulation.

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Prior to his action against Ripple, Clayton had brought 87 actions against cryptocurrency businesses. Most of these were charges of selling unregistered securities, with the two standouts being Telegram and Kik. The former had conducted a $1.7 billion token sale, one of the largest ever and had to return $1.2 billion to investors and shut down.

The investigation unearthed that in January 2018, Clayton had asked Andreessen Horowitz, one of the world’s most renowned venture capital firms, to organize a summit of cryptocurrency leaders. The purpose of the summit was for the leaders to weigh in on regulations and make recommendations to the SEC.

Sources with knowledge of the matter revealed that Ethereum was vastly represented, with several members of the Ethereum Enterprise Alliance in attendance.

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One lawyer who attended the summit, Lowell Ness, later detailed that Clayton had told Andreessen to “round up the industry players to essentially lay out a very detailed written, foot-noted memo on what existing law says about utility tokens” and “give a proposal about where to go from here.”

Ripple executives, or their affiliates, were not invited to this summit.

This summit may sound like just another random event. But a year later, one of the lawyers present in this meeting was in a panel discussion in which he took partial credit for the now-very-famous Bill Hinman speech in 2018. This was the speech in which Hinman, who was a top SEC official, said Ether and BTC weren’t securities. He didn’t exempt any other cryptocurrency.

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The lawyer, Nancy Wojtas of Cooley LLP, stated in part that “director Hinman’s speech … most of what he says in there came out of the safe harbor as well as the meetings we had with him.”

Was it a coincidence that Hinman exempted Ethereum after holding a summit with top Ethereum advocates?

Gary Gensler

Just as important to the Ripple saga is Gary Gensler, the current SEC head and former CFTC chairman. Sources have revealed that even before joining the SEC, Gensler was just as involved in laying out regulations meant for the cryptocurrency industry.

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The first meeting was in March 2018. While all the details about the meeting have not been disclosed yet, sources say Gensler asked Clayton to take an even harsher stance on digital assets.

From the onset, Gensler had made up his mind that Bitcoin was not a security under the Howey test. Ethereum, on the other hand, wasn’t as clear-cut as BTC. Ripple’s XRP for him was an obvious security, even before the case against the company.

He told the New York Times in 2018:

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There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities.

Days after the first meeting, Clayton stated in a town hall meeting in Atlanta,  “Most of what I’ve seen in the ICO space is a securities offering. It is raising money for a project where I give you my money, you give me some type of write-back that reflects a return on your project. That’s a securities offering.”

That first meeting isn’t the most controversial one, however. On December 21 last year, Gensler met Clayton once again. On his public schedule, Clayton detailed the sitdowns as “Meeting with Gary Gensler, president-elect Joe Biden’s transition team.”

The most striking thing about this meeting, in particular, was that it was one day before Clayton and the SEC charged Ripple with securities violations.

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SEC giving Ethereum and Bitcoin a “hall pass”

Ripple has accused the SEC of bias and picking the winners and losers in the cryptocurrency industry. Garlinghouse, the CEO, has openly accused Clayton, and now Gensler, of playing favorites and giving Bitcoin and Ether a hall pass.

And it’s not hard to see why the California company feels it’s being targeted, especially vis-a-vis Ethereum. The Ethereum founders held an ICO as well and Vitalik has been quite involved in developing the platform up to date, including championing for Ethereum 2.0.

Joe Lubin, the other Ethereum co-founder has been open about the project’s lobbying with regulators. He has, over the years, touted the close ties that the Ethereum family has kept with the SEC.

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For instance, he once talked about how “Bitcoin and Ethereum arrived before regulators were paying attention” and that “we were fortunate enough to frame our token as a utility token” while “others will be seen as securities.”

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Ripple

Inside the Ripple vs. SEC saga: Investigation reveals new details of personal interests at the SEC

Published

on

ripple-v-SEC
  • An investigation by FOX Business has revealed new tie-ups in the SEC vs. Ripple case, including Gensler’s huge role before he joined the SEC.
  • Andreessen Horowitz has also been identified as one of the key players protecting Ethereum and nudging the SEC on which way to regulate the space.

Eleven months ago, almost to the day, the U.S Securities and Exchange Commission (SEC) sued Ripple Labs for violating securities regulations with its sale of the XRP token. It also sued Brad Garlinghouse and Chris Larsen, the CEO and Chairman of the firm respectively, for facilitating this violation and benefitting personally from it. Since then, it’s been a lengthy legal battle that doesn’t seem to be ending soon.

But were the charges motivated by personal interests? Are there higher powers that are protecting the other projects, especially Ethereum? Was Ripple identified as the cheap target of the enforcement despite working extensively with the SEC to prove it had abided by the law? FOX Business believes so, and in its latest investigation, it made out links between Gary Gensler, Bill Hinman, Jay Clayton, Joe Lubin, Andreessen Horowitz and other powerful players that span back to over three years ago.

Jay Clayton

The biggest factor in the saga is Clayton, the former SEC head who in his last act filed the lawsuit against Ripple (literally hours before he left office). Clayton had been a Wall Street lawyer who, as a Republican, advocated for a free market. In fact, in his time at the SEC, most of the 65 new rules he passed were towards deregulation.

Advertisement

Prior to his action against Ripple, Clayton had brought 87 actions against cryptocurrency businesses. Most of these were charges of selling unregistered securities, with the two standouts being Telegram and Kik. The former had conducted a $1.7 billion token sale, one of the largest ever and had to return $1.2 billion to investors and shut down.

The investigation unearthed that in January 2018, Clayton had asked Andreessen Horowitz, one of the world’s most renowned venture capital firms, to organize a summit of cryptocurrency leaders. The purpose of the summit was for the leaders to weigh in on regulations and make recommendations to the SEC.

Sources with knowledge of the matter revealed that Ethereum was vastly represented, with several members of the Ethereum Enterprise Alliance in attendance.

Advertisement

One lawyer who attended the summit, Lowell Ness, later detailed that Clayton had told Andreessen to “round up the industry players to essentially lay out a very detailed written, foot-noted memo on what existing law says about utility tokens” and “give a proposal about where to go from here.”

Ripple executives, or their affiliates, were not invited to this summit.

This summit may sound like just another random event. But a year later, one of the lawyers present in this meeting was in a panel discussion in which he took partial credit for the now-very-famous Bill Hinman speech in 2018. This was the speech in which Hinman, who was a top SEC official, said Ether and BTC weren’t securities. He didn’t exempt any other cryptocurrency.

Advertisement

The lawyer, Nancy Wojtas of Cooley LLP, stated in part that “director Hinman’s speech … most of what he says in there came out of the safe harbor as well as the meetings we had with him.”

Was it a coincidence that Hinman exempted Ethereum after holding a summit with top Ethereum advocates?

Gary Gensler

Just as important to the Ripple saga is Gary Gensler, the current SEC head and former CFTC chairman. Sources have revealed that even before joining the SEC, Gensler was just as involved in laying out regulations meant for the cryptocurrency industry.

Advertisement

The first meeting was in March 2018. While all the details about the meeting have not been disclosed yet, sources say Gensler asked Clayton to take an even harsher stance on digital assets.

From the onset, Gensler had made up his mind that Bitcoin was not a security under the Howey test. Ethereum, on the other hand, wasn’t as clear-cut as BTC. Ripple’s XRP for him was an obvious security, even before the case against the company.

He told the New York Times in 2018:

Advertisement

There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities.

Days after the first meeting, Clayton stated in a town hall meeting in Atlanta,  “Most of what I’ve seen in the ICO space is a securities offering. It is raising money for a project where I give you my money, you give me some type of write-back that reflects a return on your project. That’s a securities offering.”

That first meeting isn’t the most controversial one, however. On December 21 last year, Gensler met Clayton once again. On his public schedule, Clayton detailed the sitdowns as “Meeting with Gary Gensler, president-elect Joe Biden’s transition team.”

Advertisement

The most striking thing about this meeting, in particular, was that it was one day before Clayton and the SEC charged Ripple with securities violations.

SEC giving Ethereum and Bitcoin a “hall pass”

Ripple has accused the SEC of bias and picking the winners and losers in the cryptocurrency industry. Garlinghouse, the CEO, has openly accused Clayton, and now Gensler, of playing favorites and giving Bitcoin and Ether a hall pass.

And it’s not hard to see why the California company feels it’s being targeted, especially vis-a-vis Ethereum. The Ethereum founders held an ICO as well and Vitalik has been quite involved in developing the platform up to date, including championing for Ethereum 2.0.

Advertisement

Joe Lubin, the other Ethereum co-founder has been open about the project’s lobbying with regulators. He has, over the years, touted the close ties that the Ethereum family has kept with the SEC.

For instance, he once talked about how “Bitcoin and Ethereum arrived before regulators were paying attention” and that “we were fortunate enough to frame our token as a utility token” while “others will be seen as securities.”

News Source

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Continue Reading