How The XRP Community Reply To The SEC’s “Shady” Move

The Securities and Exchange Commission (SEC) lawsuit against Ripple Labs, and executives Brad Garlinghouse and Chris Larsen seem to have taken a weird turn. According to the former federal prosecutor and defense lawyer James Filan, the Commission could have allegedly bypass certain rules to its benefit.

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v. BREAKING: DISCOVERY DISPUTE REGARDING CONTACTING FOREIGN REGULATORS AND SEEKING DISCOVERY OUTSIDE RULES OF FEDERAL PROCEDURE AND HAGUE CONVENTION. LETTER MOTION ATTACHED. — James K. Filan 🇺🇸🇮🇪 (@FilanLaw)

The SEC apparently is “pursuing discovery” from the United Kingdom Financial Conduct Authority (FCA) on Ripple. This method is called Memoranda of Understanding (“MOU”) and, according to a document file with the Southern District of New York and Magistrate Judge Sarah Netburn, violates the Hague Convention. The document was introduced by Ripple Labs legal representation and claims the SEC has at least 11 MOU demanding documents from “overseas entities”. The document claims “many” of these entities are the payments company business partners” and about 10 international regulators. The defense qualifies the process as “improper” and part of an “intimidation tactic” to allegedly reduce Ripple’s capacity to conduct business outside of the U.S. The document said:

Not  only  is  the  use  of  pre-litigation  investigative  tools  prejudicial  to Defendants  and  the  recipients  of  such  requests,  as described below, it also prevents this Court from  exercising  its  lawful  discretion  regarding  the  scope of permissible foreign discover.

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Behind the judge's back, the SEC violated U.S. civil court rules by issuing multiple "MOUs" to obligate foreign govts to obtain files from 's foreign business partners. They got caught.
Read the full letter to Judge Netburn here 👇

— CryptoLaw (@CryptoLawUS)

SEC “unjust” advantage in XRP case?

Commenting on the discovery, lawyer Jeremy Hogan said the SEC is placing indirect “regulatory pressure” on Ripple and its partners. Since the Commission is the only party capable of employing said tactic Hogan :

This is NOT something a “typical” Plaintiff could do and it’s not fair, so Ripple is calling dirty-poker (…). (former prosecutor), this is typical government prosecutorial pressure-litigation, applying pressure not only to you but your business friends as well.

General Counsel for Gala Games Jesse Hynes also gave his opinion and claim it was an “insane” move by the regulator. Hynes highlighted the importance and implication this lawsuit could have for the crypto industry and :

Shame on the SEC!  On the bright side, the SEC is basically admitting that this is a matter of great political and worldwide significance.  Can’t wait for that Summary Judgment motion with a major questions doctrine argument.

XRP is trading at $1,64 with an 8.9% correction after an impressive rally in the past days. On the weekly and monthly chart, XRP sits at 55.9% and 255.2% profits.