Ripple files motion to expose XRP holdings of SEC employees

Published at: Aug. 30, 2021

Ripple has filed a motion to compel the United States Securities and Exchange Commission to disclose its internal cryptocurrency trading policies as part of the ongoing legal battle with the securities regulator.

James Filan, an attorney closely following the SEC's case against Ripple, shared a new motion document seeking to bring clarity to whether the SEC permitted its own employees to trade XRP, which, as per the regulator’s allegations, is an unregistered security.

Filed on Friday on behalf of several defendants — including Ripple Labs, Ripple CEO Brad Garlinghouse, and Ripple executive chairman Chris Larsen — the motion asks the U.S. District Court for the Southern District of New York to compel the SEC to produce data on its trading policies for governing digital assets.

The motion seeks to compel the SEC to provide anonymized documents reflecting “trading preclearance decisions,” not only for XRP but also Bitcoin (BTC) and Ether (ETH). “Defendants also seek certifications concerning SEC employees’ XRP holdings — again, either with redactions of personal information or in aggregate form,” the motion action reads.

The defendants emphasized that their previous efforts to obtain the information from the SEC have failed so far. “We met and conferred with the SEC on this issue on July 8, July 15, Aug. 18 and Aug. 25, without progress,” the motion noted.

According to Filan, the court has given the SEC until Sept. 3 to respond to the latest motion. The attorney added that the order was a “text-only order,” meaning that no separate written order was filed.

Ripple’s latest legal efforts come as the community anticipates an upcoming virtual meeting with the SEC to discuss the firm’s pending motion to compel the regulator to produce a pack of documents that defendants believe are relevant to their “fair notice” defense. Magistrate Judge Sarah Netburn of the U.S. District Court for the Southern District of New York scheduled the online meeting for Aug. 31.

As reported previously, the SEC initiated a major legal action against Ripple in December 2020, alleging that XRP was a $1.3-billion unregistered securities offering. Last month, Judge Netburn ruled in favor of Ripple Labs by allowing the deposition of the former director of the SEC’s Division of Corporation Finance, William Hinman. The SEC executive is known for his 2018 speech suggesting that Ether, the second-largest cryptocurrency by market value, was not a security.