Since December, Ripple Labs has been battling a $ 1.3 billion case brought against it by the United States Securities and Exchange Commission (SEC), which accuses the digital payments company of offering an unregistered security in the form of its XRP token.
The company today won a decision that will require the SEC to deliver internal documents on Bitcoin and Ethereum. As a result, the general public may soon have a peek behind the curtain of the SEC, which has historically been discreet about the regulatory status of cryptography.
On March 15, Ripple Labs, along with their co-defendants, CEO Brad Garlinghouse and Executive President Chris Larsen, filed a motion to compel the SEC to deliver documents relating to SEC communications about Bitcoin and Ethereum or its internal communications about XRP.
“For almost a decade, the SEC has watched as XRP has grown and developed, without issuing any formal guidance that its sales may be illegal,” she wrote in the March 15 lawsuit to U.S. District Court judge Sarah Netburn . “The SEC, however, announced that sales of two similar digital assets – bitcoin and ether – were not securities offerings.”
The SEC, through public comments by former President Jay Clayton and former Chief Executive Officer William Hinman, has made it known that it does not consider Bitcoin and Ethereum, the two largest cryptocurrencies by market value, as bonds. However, the Commission has not issued any formal guidance that explains, in detail, how it came to this conclusion. A security is a type of investment contract that implies the expectation of future profits.
Ripple is probably looking for SEC mentions of XRP as a “virtual currency”, like Bitcoin and Ethereum, which would reinforce his case that it should be treated in a similar way. He can also gain some insight into the agency’s criteria for determining when digital assets are and are not securities, which he could then presumably use to argue that XRP meets those requirements.
“I will largely grant the defendants’ motion,” Judge Netburn said during the hearing, as reported by Law 360. It included documents such as minutes of meetings and internal memos as part of the request, but not internal emails from team.
The SEC argued against the move, claiming that “the prosecutor’s actions are what needs to be the focus here.”
The XRP has risen 22% in the past 24 hours, reaching $ 1.06 – its highest price in more than three years.
* Translated and edited with authorization from Decrypt.co