SEC wins time to resist document handover in XRP suit

A federal judge on Monday has given the U.S. Securities and Exchange Commission (SEC) until Feb. 17 to fight her earlier order to turn over to the defendant Ripple Labs certain sensitive government documents in the agency’s lawsuit alleging the XRP token is an unregistered security.

Fast facts

• Ripple and XRP investors initially believed they had won a legal skirmish after U.S. Magistrate Judge Sarah Netburn on Jan. 13 ordered the SEC to turn over the documents, including notes of private SEC meetings with third parties over Ethereum and the draft of a controversial 2018 speech by then-SEC director William Hinman that declared Bitcoin and Ether were not securities.

• But the SEC pushed back by asking for more time to argue against the disclosure order — and Netburn is now giving the commission nearly four weeks to do so.

• The SEC sued Ripple Labs and two top company executives in December 2020, alleging that its sale of XRP was an unregistered securities offering worth over US$1.38 billion.
• In its defense, the San Francisco-based payments technology company is arguing that the SEC did not provide “fair notice” that it would treat the XRP token differently from Bitcoin and Ether. 

• As the U.S. and many countries around the world are still developing a regulatory framework over cryptocurrencies, the SEC v. Ripple lawsuit is being closely watched for its potential to legally define XRP and many other cryptocurrencies.