Ripple Labs has secured another victory against the United States Securities & Exchange Commission (SEC) as the judge refused to grant the SEC’s request for Ripple’s legal concerns regarding its native token, XRP.
The SEC previously asked Magistrate Judge Sarah Netburn for an approval to access Ripple’s records documenting whether the sales of XRP token adheres to the federal securities laws.
The SEC stated that Ripple’s knowledge of the XRP’s legal status would support its $1.9 billion lawsuit, to which Ripple has refuted since the start of this ongoing lawsuit in December 2020. However, that disproval has not stopped the SEC from wanting access to Ripple’s legal concerns.
“Ripple asserts that the SEC’s requested communications are protected by the attorney-client privilege, which has not been waived,” said Judge Sarah Netburn in a public filing:
This decision further supports Ripple’s defense that the securities regulator failed to give fair notice to the company and other market participants regarding XRP’s status as an unregistered security.
Attorney Jeremy Hogan — who has been keeping a close watch on the case — has remarked on the importance of Judge Netburn’s decision. This is because the Judge finds Ripple’s subjective beliefs about XRP to be irrelevant to the fair notice defense — taking away the leverage that the SEC wanted to use against the defense.
Judge Netburn added that her final decision is applicable to this specific issue only, saying:
“The Court takes no position about whether Ripple’s pleaded defense is cognizable or if it will prove meritorious.”
The attorney and community leader for XRP holders, John Deaton, has always believed that the SEC’s chance to access Ripple’s legal advice memo is highly unlikely. That is unless Ripple decides to share it with others.
Although this outcome is in Ripple’s favor, it is still not sufficient enough to force the SEC to settle the case, said Deaton.
Moreover, Deaton agreed with a community member’s suggestion that the decision implies that the judge disagrees with the argument that Ripple has a fair notice because they had legal advisory.