Judge denies another SEC attempt to shield documents in Ripple case

Quick Take

  • A district judge denied another attempt from the SEC to shield documents in its legal fight with Ripple.
  • The SEC has sought to shield internal documents related to the drafting of an influential speech on cryptocurrencies. 

A U.S. District Judge has rejected the Securities and Exchange Commission's (SEC) attempts to shield documents related to a 2018 speech on cryptocurrencies from former Division of Corporation Finance Director Bill Hinman in its ongoing case with blockchain firm Ripple.

The commission had appealed a prior judge's decision for it to hand over the materials as part of its legal case with the crypto payments company.

The two have been locked in a legal battle since the SEC brought its case against Ripple in 2020, alleging the sale of its XRP token constituted an unregistered securities offering. Since then, much of the case has centered on internal documents relating to Hinman's speech, which sought to create regulatory wiggle room for some digital tokens to be exempted from securities registrations.

Ripple has continued to request the emails and memos related to the speech, and Magistrate Judge Sarah Netburn has repeatedly sided with Ripple, denying the SEC's requests for reconsideration in February and April. In July, the SEC once again objected, kicking the issue to District Judge Analisa Torres. Torres overruled the objection today, directing the SEC to comply with the orders and produce the documents.

The SEC has sought to avoid handing over internal communications on the speech in the discovery process, employing what Netburn characterized as conflicting arguments. Initially, the SEC claimed Hinman's speech consisted of personal views on crypto rather than agency-wide policy. Later, it attempted to shield the documents by claiming they were part of his SEC duties and therefore protected under a statute that provides privacy for internal deliberations for crafting policy or reaching decisions.

In the previous opinion on the matter, Netburn said the SEC was attempting to have it both ways, saying the conflicting arguments suggested "that the SEC is adopting its litigation to further its desired goal, and not out of a faithful allegiance to the law."

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