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October 8, 2022
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US Judge Grants SEC Access to Ripple’s Lost Insider Talks

The US SEC gained access to Ripple’s Slack’s lost internal messages after the company delivered only a portion

The legal case between the US Securities and Exchange Commission (SEC) and blockchain firm Ripple Labs continues to intensify, and this time, the US judge grants the SEC access to Ripple’s lost insider talks.

A win for the SEC

As reported by Law360 , the SEC won the discovery after US Magistrate Judge Sarah Netburn ordered Ripple to give the regulator access to more than a million previously lost Slack messages.

While Ripple has already turned over some of its internal discussions to Watchdog, the company has refused to turn over a large portion of the communications. The company cited a processing error, although it had previously agreed to research its “terabytes” of Slack data at the beginning of the discovery.

The SEC described Ripple’s failure to produce Slack’s full talks as “highly harmful”, since the fraction received indicated that the lost messages would be relevant to the case.

After the failure to comply with its request, the Commission filed a motion in August to access these messages. According to the regulator, they are “relevant to the claims and defenses of the parties and proportionate to the needs of the case”.

In addition to Ripple’s Slack messages, the regulator is also seeking access to all 22 email guardians’ conversations.

The SEC alleged that the messages “include: (a) discussions about Ripple’s desire to create speculative trades in XRP, (b) the effect of Ripple’s announcements and efforts and Ripple’s concerns about XRP pricing, the relationship and importance of XRP sales to Ripple’s overall business, and (d) the regulatory status of XRP.”

Judge: Ripple’s settlement trumps any encumbrances

Ripple rejected the SEC’s motion, noting that the regulator’s request is unreasonable and unfair because recovering all of Slack’s lost messages would not only cost up to $1 million, but would also take many months.

Regardless of the company’s argument, Judge Netburn noted that its previous agreement to produce Slack’s internal communications outweighs any burden it will face in retrieving the messages.

Meanwhile, CryptoPotato reported last week that Ripple has filed a motion to expose the XRP holdings of SEC officials.

Source: CryptoPotato

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