The SEC has now filed a motion requesting ‘terabytes’ of additional Slack info from Ripple as part of its case against the blockchain company.
The Securities and Exchange Commission (SEC) has filed a motion with the Southern District of New York against Ripple concerning the provision of data. The latest twist is that the SEC wants Ripple to submit its employee communications history on Slack, alleging that the previous submission was incomplete and insufficient. It further stated that Ripple compiled and sent only a small sample of its Slack employee-messaging paper trail. According to the agency, a “massive quantity” of Slack data was overlooked in the process.
The SEC and Ripple Case
Ripple initially denied the SEC allegations but has since ascribed the oversight to a “data processing mistake.”
The Commission’s filing states that:
“Ripple’s data error and refusal to produce most documents has already been highly prejudicial to the SEC. Among other things, the SEC has deposed 11 Ripple witnesses using incomplete records of their communications.”
The SEC believes the missing information comprises over one million messages, spanning ‘terabytes of data’, which overshadows the blockchain firm’s large email productions. The regulatory agency believes the law should compel Ripple to “…search and produce responsive messages from 22 of its email custodians”. It further argues that Ripple’s employees communicated as often on Slack as they did via emails.
Finally, the SEC noted that it derived “critically important information” from previous Slack messages sent by Ripple that were not part of emails or other documents. According to Jorge Tenreiro, lead counsel for the SEC, “The parties have met and conferred as to this issue and are at an impasse”.
In light of recent developments, Ripple filed a request to extend the motion by four days from August 12th. This, it said, would give the exchange platform enough time to respond to the SEC’s motion.
What Other Stakeholders Say
Attorney Jeremy Hogan, believes the recent move is another indicator that the SEC wants to classify XRP as a security. The lawyer further stated that by classifying Ripple as a security rather than a token, it was more likely to fall under SEC jurisdiction. According to him, the SEC is:
“Attacking from the flank and arguing Ripple marketed and treated XRP like a security and therefore it is. The SEC has had some success with this argument in the past and it makes sense as a strategy since in all substantive ways XRP is NOT like a security”.
The lawyer, who enjoys popularity within the XRP community, shared this opinion on Twitter.
The Chairman of the Securities and Exchange Commission, Gary Gensler is an advocate for decentralized digital currencies. He has repeatedly called for increased regulations to adopt rules governing decentralized crypto. However, the former Commodity Futures Trading Commission Chair, Christopher Giancarlo believes differently. Giancarlo classified crypto as commodities and not securities, stating that they should not fall under SEC jurisdiction.
Both the SEC and the currency exchange platform have locked horns in an ongoing legal battle for a while now. The contention stems from the regulatory agency accusing Ripple of selling unregistered securities and raising $1.3 billion in the process.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.