SEC refuses to provide more answers to Ripple’s contention interrogatories

By: Jinia Shawdagor
Jinia Shawdagor
Jinia is a cryptocurrency and blockchain enthusiast based in Sweden. She loves everything positive, travelling, and extracting joy and… read more.
on Sep 9, 2021
  • SEC claims Ripple aims to trap it to answer questions about the legal status of BTC and ETH.
  • The agency says Ripple refused to specify the data it needed before the end of fact discovery.
  • Asking the court deny Ripple’s motion, the SEC claims it offered Ripple satisfactory answers.

The US Securities Exchange Commission (SEC) has asked the court not to force it to offer further responses to Ripple’s contention interrogatories. In a letter to Judge Sarah Netburn, the agency claimed Ripple is trying to lure it into a trap of answering the questions about the legal status of Bitcoin (BTC/USD) and Ethereum (ETH/USD). The regulator added that it has never filed an enforcement action against either BTC or ETH.

In the letter, the SEC argued that Ripple waited until the end of fact discovery, which happened more than seven weeks ago, to inform it that the answers it submitted were deficient. The agency added that it supplemented five of the responses upon issue after meeting and discussing with the defendants. Additionally, the SEC claims that it asked Ripple to pinpoint the specific information it needed.

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However, the defendants refused to specify what they needed and went ahead to file the motion demanding more information from the agency three hours before fact discovery closed. The SEC added that it believes it has substantively answered the interrogatories at issue as mandated by THE Federal Rules of Civil Procedure.

SEC claims its answers were complete

Explaining why it is not relevant to offer additional responses to Ripple contention interrogatories, the SEC said,

Defendants’ argument here boils down to a complaint that they do not like the answers they received to the interrogatories at issue, in large part because the SEC’s and Defendants’ interpretation of the applicable law differs. But the SEC is not required to answer the interrogatories in a way that adopts Defendants’ incorrect reading of the law.

The SEC went on to note that the answers it offered were no more evasive or incomplete than the responses Ripple provided to its interrogatories. As such, the agency called on the court to throw out Ripple’s motion to compel it to answer interrogatories that identify its theory on how the Howey Test can be applied to all transactions made by Brad Garlinghouse and Chris Larsen over eight years.

This news comes as the Ripple and SEC case inch closer to completing a year with no clear end in sight. While the SEC filed the lawsuit against Ripple, it seems to have lost the upper hand. For instance, Judge Netburn recently allowed the deposition of the former director of the SEC’s Division of Corporation Finance, William Hinman, who said ETH is not security despite holding an unregistered initial coin offering (ICO) in 2014.

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