Further developments in the case between the SEC and Ripple have led to renewed confidence that a conclusion may soon be reached. The long-awaited hearing on Ripple’s motion for a discovery conference regarding the SEC’s improper assertion of the Deliberative Process Privilege (DPP) was held a few days ago.
In early June, Ripple filed a motion to compel the Securities and Exchange Commission to turn over internal documents regarding cryptocurrencies BTC, ETH, and Ripple’s XRP. This followed a prolonged back and forth between the two parties and Judge Sarah Netburn.
The SEC has argued its internal documents, which include the agency’s discussions over the nature of XRP and ETH, are protected by DPP (Deliberative Process Privilege). Under this, they are required to only provide a privilege log explaining why each document should not be produced.
Judge Netburn has asked the SEC to produce the documents twice already, but not a single document has been brought to light.
In this hearing, Ripple’s attorney, Matt Solomon argued that the documents are relevant to the case as they were likely to prove that the SEC was confused on whether XRP and other cryptocurrencies were securities or not.
The outcome was a small victory for Ripple as Judge Netburn ruled that the SEC should provide “lightly redacted” copies of all the documents in question to Ripple, as well as unredacted versions to her for an “in-camera” review. From the ruling, Judge Netburn seems to be convinced that the documents are relevant enough to overcome any DPP argument.
When the documents are produced by the SEC, the parties will proceed to provide legal briefs on why each document is privileged or not. After this, the judge will rule on the status of each document in question.
Observers and cryptocurrency proponents have been reacting to the outcome of the hearing. One observer, Attorney Jeremy Hogan, who has been following the case, stated that it was highly likely that Judge Netburn will eventually order most of the documents to be produced in the case.
John Deaton, another attorney, has speculated that Ripple’s legal team already knows the content of some of the documents in question and how important they were to the case, hence their insistence on the SEC producing them.
“The Ripple attorneys seem to almost guarantee that the BTC, Ether, and XRP documents that the SEC refuses to turn over will be absolutely exculpatory and potentially end the case. It’s almost as if the Ripple defense team knows something the public doesn’t” he says.
This, he believes, is a result of the background of several of them, which traces back to the SEC.
In a statement, CEO Brad Garlinghouse also opined that the case was not just about Ripple but about how the SEC’s method of regulating the cryptocurrency industry by showing up to enforce laws when it had not provided clear rules would hurt the cryptocurrency industry. Therefore, Ripple’s victory was important to ensure that the same precedent could not be repeated against other cryptocurrencies.