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Ripple Hints SEC Considered XRP Not a Security Ahead of Trial

Internal SEC documents could destroy the case against Ripple on XRP.

Japanese equity research under the scrutiny of the FSA

As we approach the final chapters of the SEC lawsuit against Ripple, the exchanges between the parties have become tougher and include more details than before.

Ripple’s attorney’s recent remarks have led legal experts following the case to conclude that there really is something incriminating for the SEC in the agency’s internal documents that Judge Netburn ordered produced.

Lawyer Jeremy Hogan, a partner at law firm Hogan & Hogan, called it a “smoking gun” in a video where he explained the latest updates on the case.

Recalling that the SEC has gone to extraordinary lengths to avoid handing them over, including asking Judge Netburn to reconsider his order and indicating that they intend to appeal Judge Netburn’s decision to Judge Torres if it does not change his mind, Attorney Hogan considers the legal positions of the SEC on this subject to be completely anomalous.

In an earlier video, he shared his suspicions that something was wrong: “There must be something really wrong with the SEC. Something that really destroys the SEC case. It must be really bad to justify the legal gymnastics the SEC has played on this issue.

“Spot on the money,” he now says of his suspicions, which may turn out to be that the SEC previously analyzed XRP and concluded it was not a security.

In the plaintiff’s latest attempt to keep its internal documents out of the trial, the SEC took part of the judge’s decision – “for individual defendants to be found guilty, they must have knowledge of wrongdoing” – and applied it to argue internal documents related to Hinman’s speech are irrelevant.

“In light of Judge Torres’ order, it is clear that internal SEC documents – reflecting its staff’s thinking on XRP, Bitcoin, Ether, or any other digital asset – are irrelevant…” , the SEC said in the filing.

Ripple, in turn, made quite a revelation: that Hinman “potentially” analyzed XRP and concluded that it was not a security.

“The SEC should not be allowed to argue to the investigator that Mr. Garlinghouse and Mr. Larsen were reckless in not acknowledging that XRP buyers viewed XRP as an investment in a joint venture while potentially conceiving that the SEC’s own Director of Corporate Finance had analyzed a substantially similar asset (and possibly even XRP itself) and concluded that was not the case.

Attorney Hogan admitted to the possibility of a bluff, but it’s more likely not.

Regarding the progress in SEC v. Ripple, the defendants want to move quickly with summary judgment on the main issues of the case: whether XRP is a security and on the fair notice defense.

The SEC, however, is trying to hold them back with more delays by keeping the discovery alive. This behavior, which Ripple calls “gambling,” has fueled the harshest language yet.

“Remember, not all the fireworks and frustration stem from the legal issues of the case. The conflict is that Ripple is trying to move the case forward quickly and the SEC, for some reason, is trying to delay , delay, delay,” attorney Hogan explained.

“If Ripple can obtain summary judgment on these issues and win on either issue, the case against Garlinghouse and Larsen disappears. So Ripple says that since the discovery involving these two issues is complete, we can move forward with the Ripple case on one track and, in the meantime, continue the discovery of other issues related to the individual defendants on another track.

“The SEC, on the other hand, is trying to delay the case by saying that the Ripple case and the case of the individual defendants are just one case. And Ripple should not be allowed to move forward until any discovery is not complete with respect to individual defendants.

“If it agrees with Ripple, they suggested opening submissions on May 22 this year, which would put us on schedule for a decision at the end of the summer as planned. If the judge agrees with the SEC, a summer 2022 conclusion to this case is probably too optimistic.”

The judge recently ordered the two parties to agree on an information schedule for the summary judgment.