SEC Has Refused To Produce Documents Related To Its Employees XRP Holdings

ByTroy Morris

Sep 18, 2021

The battle between the United States Securities and Exchange Commission Vs. Ripple Labs is getting fiercer day by day. The recent update is the motion filed by Ripple in the District Court of Southern New York requesting for the government agency to provide the documents that contain the crypto holding of its employees.

Referencing the privacy of the concerned employees, the SEC has requested that the court should deny such requests from the defendants.

Unjustified Intrusion

On the 27th of August, the defendant, Ripple, filed a motion in the court of law, compelling the SEC to reveal all its employees involved in the crypto market who are holding BTC, ETH, and even XRP especially. In the motion, the defendant requested the information in an anonymized or aggregated form.

On the 3rd of September, however, an opposition was filed against Ripple’s motion by the SEC, claiming that to reveal those documents is to breach the privacy of the concerned persons. The opposition used the word “Unjustified intrusion.”

Pascale Guerrier, the Trial Attorney of the Division of Enforcement of the SEC, mentioned in the document that the sensitive data collated from the employees are for the sake of ensuring compliance to the ethical rules that can lead to conflicts of interest. This is handled by the Office of the Ethics Counsel, and it is not to check whether any transaction is in compliance with the securities law.

Since the document in the first place is not an indicator to check if a transaction complies with the national securities law, it will outrightly be irrelevant for the case. For the Ethical Counsel Office, XRP is just on the watch list, not exactly on the list of Prohibited Holdings.

Other Factors Involved

Another reason given by the SEC for the court to deny the motion filed by Ripple is that revealing such aggregated data for a case through the motion requested for anonymized documents will break the trust the employees have in the office of Ethics Counsel.

Additionally, for the concerned office to gather the data, the effort will gulp massive resources as the requested documents are materials worth nine years. Considering this, calling for this document is “simply useless.”

“For us,” the document stated, “the privacy interest of our employees outweighs the benefit derived from the disclosure.”

An Expert Opinion

Former Federal Prosecutor and defense lawyer James K. Filan shared the screenshots of the SEC document commenting that the SEC is just so wrong on the facts stated and even wrong on the law. “For me,” he said, “this case is going to be very long.”

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