An unexpected twist in the SEC vs Ripple case

Ripple has been given access to Binance’s records regarding its case with the Securities and Exchange Commission. The documents may provide substantial evidence that CEO Brad Garlinghouse acted outside the SEC‘s jurisdiction.

The case between Ripple and the SEC took a new turn this week after Ripple gained access to Binance documents.

Judge Sarah Netburn granted Ripple CEO Brad Garlinghouse’s request to gain access to Binance records. According to the document, the approval was granted on August 3:

Will the documents from Binance shed new light on the matter?

The SEC claims that Garlinghouse sold more than 357 million XRP tokens on cryptocurrency trading platforms to investors “around the world” as an unregistered security.

On August 2, the legal team representing Garlinghouse requested access from Binance Holdings Limited to documents “relevant to the case and impossible to obtain by other means.”

The filing states that Ripple’s CEO sought proof based on his belief that Binance has unique documents and information pertaining to the case. The records pertain to XRP transactions that were allegedly conducted by Garlinghouse and may provide evidence that the Ripple CEO transacted outside the SEC’s jurisdiction.

Ripple’s legal team cited Section Five of the Securities Act of 1933, stating that the alleged illegal XRP sales only apply to domestic sales and securities offerings. The lawyers said Garlinghouse’s sales of XRP were “predominantly made on digital asset trading platforms outside the United States” and are not subject to the regulations cited by the SEC.

Garlinghouse and Larsen filed a petition with international authorities in June requesting documents from several other cryptocurrency exchanges outside the U.S., including Bitstamp, Huobi and Upbit.

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Ripple also argues that the SEC cannot regulate XRP as a security because it is a medium of exchange used for international and domestic transactions. In mid-July, Judge Netburn allowed the company to call William Hinman, a former SEC official, who has publicly stated that ETH is not a security.

The SEC – Ripple case kicked off in December 2020, when the SEC filed a motion against Ripple, alleging that Brad Garlinghouse and Chris Larsen conducted an “unregistered, ongoing ofer merc of digital asset securities” in the course of selling XRP tokens.

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