A US court has decided, rather sensationally, to rule in favour of the SEC, which in early August had requested to receive communications between the crypto company Ripple and their employees on the famous social networking site Slack.
Summary
SEC will give Slack conversations to the SEC
It is about one million Slack conversations that took place between Ripple and its employees.
Ripple has claimed that it would cost up to $1 million to produce these communications. But Judge Sarah Netburn considered the texts to be important and unique evidence.The judge noted that she believes this additional information is important in the case, and so the SEC’s motion was granted.
In addition, the judge argued that Ripple’s cost was highly disproportionate to the importance of these new documents in the pending litigation.
This decision is part of a lawsuit that the SEC filed in December last year against the crypto company, which is accused of raising more than $1.3 billion through an unregistered offering of digital asset securities.
The long legal battle between the SEC and Ripple
The story of the lawsuit filed by the SEC against Ripple, co-founder Christian Larsen and CEO Bradley Garlinghouse, is one that the company itself has described as a possible blow to the heart of the entire cryptocurrency industry. The SEC’s accusation against Ripple is not only that it sold unregulated securities, because it considers the company to be a security and therefore should act as such, but the aim could be to undermine the very credibility of what is currently the third-largest cryptocurrency by capitalization, after Bitcoin and Ethereum.
Unlike Bitcoin and Ethereum, which are minted slowly over time, XRP does not depend on miners to create and distribute its tokens. Instead, Ripple‘s founders created the entire supply of XRP, 100 billion of them, in one fell swoop. And it is precisely this that would be one of the key arguments used by the SEC to prove that it cannot be called decentralized like Bitcoin and Ethereum.
A lawsuit that could have serious repercussions on the crypto world
According to many observers, this lawsuit between the SEC and Ripple could represent a possible sword of Damocles for the entire crypto world and its future regulation. A defeat in court by Ripple could open dozens of lawsuits not only by the SEC but also by investors against similar companies, generating a domino effect that is difficult to predict. Suffice it to say that in December, Ripple’s share price lost 23% of its value following the news of the SEC lawsuit.
“It has been more than a decade since this new asset class was published and we have yet to begin to focus on creating regulations aimed at it,” said Carol Goforth, a professor at the School of Law at the University of Arkansas who studies cryptocurrency and who explains very well how this fact can represent a watershed for the entire crypto world and the delicate issue of its regulation.
