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Ripple Blocked from Seeing SEC Employees' Crypto Holdings

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Tue, 21/09/2021 - 15:54
Ripple Blocked from Seeing SEC Employees' Crypto Holdings
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Magistrate Judge Sarah Netburn has denied Ripple's motion to obtain documents about the U.S. Securities and Exchange Commission's preclearance decisions regarding cryptocurrency trading as well as the staff's personal holdings.

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According to the court, the defendants have failed to justify the intrusion into employees' financial conduct.

When it comes to SEC employees' crypto holdings, the judge notes that disclosing such information has been prohibited by Congress in order to protect the privacy of government employees:

Defendants are not entitled to SEC employees' annual certifications of XRP purchases, sales, and holdings.

As reported by U.Today, Ripple intended to get its hands on the annual certifications of SEC staff that would show the amount of crypto they owned in aggregate.

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Particularly, the company wanted to find out whether the staff was able to trade XRP prior to March 9, 2019, when the official investigation order in the case was issued.

The defendants claimed that individual trading decisions could shed light on the lack of regulatory clarity with regard to digital assets. The SEC, however, argued that the trading reports of its employees were "presumably confidential."

The judge asserts that the regulator's preclearance process is irrelevant to the case since it does not involve determining whether a certain cryptocurrency is a security. Moreover, revealing how the agency's Ethics Counsel perceived each individual decision could lead to "collateral litigation disputes."

The judge also denied the SEC access to the bank records of Ripple CEO Brad Garlinghouse and co-founder Chris Larsen in early April. 

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