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Ripple Blocked from Seeing SEC Employees' Crypto Holdings

u.today 21 September 2021 16:41, UTC
Reading time: ~2 m

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. 

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

When it comes to the SEC employee's 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.

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 claim 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 doesn't involve determining whether a certain cryptocurrency is a security. Moreover, revealing how the agency's Ethics Counsel viewed each individual decision could lead to "collateral litigation disputes."

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