There seems to be no end in sight to the legal battle between Ripple and the US SEC. However, the pendulum of victory is quite tilting in the favour of Ripple in a recent court’s decision where the US SEC moved a motion for the court to compel Ripple to grant it access to memos discussing XRP sales with its lawyers, which the court had denied.
The latest ruling comes on the heels of the lawsuit filed by the regulator against Ripple Labs, CEO Brad Garlinghouse and Executive Chairman, Chris Larsen in December 2020, alleging that XRP was a $1.3 billion unregistered securities offering.
Magistrate Judge Sarah Netburn of the District Court for the Southern District of New York in her recent judgment referred to the attorney-client privilege which fosters full and frank communication between attorneys and their clients. The judge observed that Ripple had not waived its attorney-client privilege, although a defendant could waive such privilege in certain situations.”
According to the SEC, Ripple could have been aware XRP was a security from its legal advisors before going ahead with the token sale in 2013. Thus, it moved the said motion on May 7.
The ruling is in line with the fair notice rule which requires the court to interpret vague criminal statutes in favor of the defendants. Ripple’s defense is that the regulator failed to inform market participants that it regarded XRP as a security.
In addition, the court cited the SEC’s eight-year delay in slamming an enforcement action against Ripple even after it had been listed on over 200 exchanges, transactions worth billions of dollars in sales had taken place, including a settlement between U.S. Department of Justice and FInCEN.