Following an order from the US Securities and Exchange Commission (SEC), issuer of the token XRP Ripple must provide one million Slack messages between its employees. According to the SEC, Ripple initially agreed to provide this data. However, the company later refused. It described the request as an “extensive and costly fishing expedition” that would take up too many resources and time. Specifically, it expects to spend up to $1 million to produce the news.
“Unique and Crucial Evidence”
Judge Sarah Netburn, who is presiding over the case against Ripple for selling unregistered securities, insisted on the production of the messages. According to her, it is unique and crucial evidence for the Commission’s ongoing case against the multi-billion dollar company.
Under the agency’s order, the company must provide access to the messages from 22 custodians. According to the SEC, Ripple’s prior consent to release the messages outweighs the perceived burden. Moreover, the messages are relevant to both parties in this case.
SEC released the following statement:
The requested Slack messages are relevant to the parties’ claims and defenses and are proportional to the needs of the case. Any burden on Ripple is outweighed by its prior agreement to produce the relevant Slack messages, the relative resources of the parties, and the amount in controversy.
The judge issued the order after requiring the SEC to turn over some documents. She also ordered the SEC to produce internal records of conversations about the nature of Ethereum and Ripple during an Aug. 31 conference call held to discuss the SEC’s privilege dispute. The judge will review these in camera.
Background of the case
The SEC brought charges against Ripple back in December 2020. The regulator accused current Ripple CEO Brad Garlinghouse and former CEO Chris Larsen of conducting an ongoing, unregistered securities offering of digital assets by selling XRP tokens. The executives countered that the token was not a security. In any case, the token lost more than 50% of its value as investors began selling in a panic.
Assertions of innocence
Since then, the token has recovered. At the time of writing, it is trading at $1.27. In June of this year, Larsen and Garlinghouse petitioned international regulators to demand Dokuments from Upbit, Huobi, Bitstamp and several other crypto exchanges. These documents purport to prove Ripple’s innocence. This is an effort to file a motion to dismiss the SEC proceeding.