According to Law360, U.S. Magistrate Judge Sarah Netburn granted the defendants’ motion “in large part,” determining that SEC minutes or memos concerning crypto are likely discoverable. Netburn stated that staff-to-staff email communications do not need to be produced. Netburn also allowed for the SEC and Ripple to raise disputes with the ruling.
In December, the SEC filed a lawsuit claiming Ripple Labs, its CEO Brad Garlinghouse, and chairman Christian Larsen, raised $1.38 billion through unlicensed security offering in August 2013.
Ripple has challenged the SEC’s suit, alleging that XRP is akin to Bitcoin or Ethereum — both of which have been classified as commodities by the SEC, in addition to criticizing the eight years taken for the agency to file its complaint against Ripple.
According to Cointelegraph, Law360 announces that Garlinghouse’s counsel, Matthew Solomon, thinks it may be “game over” for the SEC’s suit should they find evidence the regulator has deemed XRP akin to BTC or Ether, noting the SEC’s regulatory purview does not extend beyond securities.
With the SEC having taken eight years to file its complaint against Ripple, the firm’s lawyers also think they can undermine the SEC’s claims should they be able to produce documentation showing contradictory determinations as to the regulator’s classification of XRP.
Solomon stated that “We need this discovery to defend ourselves.”
Nonetheless, SEC counsel Dugan Bliss has criticized the defendants for seeking to put the commission “on trial” by scrutinizing its internal deliberations, rather than defending its reportedly illicit actions, saying:
“The actions of the promoter are what need to be the focus here.”
During the proceedings, Judge Netburn noted significant public interest in the hearing, with more than 500 individuals having dialed in through a public phone number to observe the case. The judge also warned one individual for rebroadcasting audio from the hearing in violation of New York regulations.
The judge stated:
“Whoever is engaging in this conduct may be subject to criminal sanctions.”