The legal battle between the US Securities and Exchange Commission and Ripple has taken on a new development as the agency accused XRP holders of spreading false statements about their leadership on various social media platforms. This is because the SEC tried to deny Ripple’s request to remove former SEC officials.
SEC says XRP Holders are Making “Negative and False Statements” About its Leadership
In connection with this, Ripple filed a motion to testify with the court a few days ago, asking for permission to take an oath to question several former senior SEC officials. Although these officials did not reveal their names, observers suggested that the company’s former CFO William Hinman and Chairman Jay Clayton fit this picture.
On Thursday, the SEC filed a motion with Manhattan Judge Sarah Netburn asking her to deny Ripple’s motion to summon William Hinman. The US Securities and Exchange Commission argued that the XRP Army had made “negative and false statements” about its leadership, including Hinman, on social media.
According to the agency, admitting former civil servants, coupled with social media attention, will “increase public service deterrence”. In other words, it will prevent qualified individuals from holding senior positions in the SEC.
Some of the beliefs shared on social media by the XRP military about former SEC officials include that Clayton and Hinman were using their inside knowledge to help China lead the United States in the US economy, and calling for that they be examined.
The SEC also claimed that if Ripple’s application is approved, it will lead to a large number of similar motions for the dismissal of high-level regulators.
“Allowing Defendant [Ripple] to remove Director Hinman could result in Director Hinman receiving multiple subpoenas from individuals alleged to have violated securities law registration requirements during his tenure with the SEC.
The agency further alleged that the former director did not have firsthand information about the facts related to Ripple’s sale of the XRP cryptocurrency and its defense of a fair termination, so it should not be removed.
Other Lawsuit Developments
The U.S. Securities and Exchange Commission filed a lawsuit against Ripple last December, alleging the financial technology company sold approximately $1.3 billion in XRP tokens, which is an unregistered offering of securities.
Ripple has beaten the SEC several times, including the recent approval of Judge Netburn’s application for access to the agency’s internal trading policies. In particular, the judge is of the opinion that the information requested by Ripple meets “low standards of relevance”.
In addition, US Securities and Exchange Commission Hester Pierce (nicknamed Crypto Mom) told Bloomberg a few days ago that XRP is not necessarily a security. For them, the underlying investment contract is securities.
At the same time, Jeremy Hogan, an attorney who is closely following the SEC v. Ripple case, predicts that it can last until early 2022 if there is no agreement.
