SEC Refuses to Provide Further Responses to Ripple's Contention Interrogatories
In a letter to Magistrate Judge Sarah Netburn, Mark Sylvester, senior trial counsel at the U.S. Securities and Exchange Commission, asked the court not to compel the agency to provide additional answers to Ripple’s contention interrogatories.The agency is accusing the defendants of trying to “trap” it into answering questions about the legal status of Bitcoin and Ether, pointing to the fact that it has never brought an enforcement action against either of the two cryptocurrencies:
There is no dispute that the SEC has never filed an enforcement action against issuers of Bitcoin or Ether contending that they engaged in securities transactions at the time of those transactions.
The SEC says that it doesn’t typically make independent determinations concerning whether certain financial instruments are securities.
Litigants typically rely on contention interrogatories to determine whether adversaries’ contentions are supported by facts.On Aug. 31, Ripple’s lawyers filed a motion to compel the plaintiff to answer interrogatories that identify the regulator’s theory on how the Howey Test can be applied to all transactions made by the executives over the course of eight years.
In the aforementioned motion, the defendants argued that the agency had refused to provide the information sought by various interrogatories.Particularly, it failed to identify all terms of the contract that purportedly led to an expectation of profit:
The SEC should not be permitted to play cat-and-mouse on this issue.
The agency also didn’t answer whether or not it contends that Bitcoin and Ether are securities within the meaning of Section 2 of the 1993 Securities Exchange Act since it believes that the legal status of the aforementioned cryptocurrencies to be irrelevant to the case.On top of that, the SEC also failed to specify whether Ripple’s efforts were necessary to push the price of XRP.
The SEC fires back
The regulator, however, claims that Ripple made similar objections to its own interrogatories.The SEC Letter to Defendants also noted that, while Defendants accused the SEC of acting improperly by sometimes incorporating its responses to other interrogatories, Defendants had engaged in the very same practice in responding to the SEC’s interrogatories. Furthermore, the Southern District of New York doesn’t require detailed responses to contentions litigations.The SEC says that it did provide the defendants with the term “contracts,” claiming that it shouldn’t accept Ripple’s “incorrect reading.” In addition, it has identified “a variety” of ways in which the company’s efforts resulted in XRP price spikes.Source