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SEC vs. Ripple: Fight for Hinman Emails Continues

15 Apr, 20222 min readRegulation
SEC vs. Ripple: Fight for Hinman Emails Continues

The U.S. Securities and Exchange Commission has informed Magistrate Judge Sarah Netburn that it intends to oppose the court’s recent deliberative process privilege (DPP) ruling, asking for additional time. The agency has said that it intends to raise new privilege assertions in its recent letter. On Jan. 13, the court ruled that the SEC must produce emails related to the controversial Ethereum speech of former high-profile official William Hinman, in which he declared that the second-largest cryptocurrency wasn’t a security.The plaintiff then filed a motion for reconsideration, but it was rejected by the judge earlier this week, which some described as a big win for Ripple. The SEC is not satisfied with the decision. The agency has noted that the defendants are willing to proceed to summary judgment without a definitive ruling on the issue.

No additional discovery

The SEC doesn’t plan to take any additional discovery in the Ripple case for the time being. At the same time, the letter says both the plaintiff and the individual defendants may request additional discovery related to the disgorgement remedy in the future.In addition, Ripple’s lawyers have informed the SEC that the defendants reserve the right to assert any appropriate defenses in the future. The SEC may seek discovery related to any such defense in order to be able to strike it as prejudicial.

The SEC sued

and its top executives in December 2020, alleging that the defendants had illegally raised more than $1.3 billion with the help of an unregistered security asset. The plaintiff is seeking disgorgement of ill-gotten gains.

In his motion to dismiss the lawsuit, Ripple co-founder Chris Larsen claimed that the SEC’s claims for disgorgement and civil monetary fines had to be dismissed as time-barred. As

, the court shot down the executive’s attempt to toss the lawsuit in early March. The court argued that each specific transaction “constituted a separate violation of the statute.” CEO Brad Garlinghouse’s motion to dismiss the lawsuit was dismissed as well.

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