- Ripple CEO Brad Garlinghouse’s lawyers have filed a request for Binance documents containing possible evidence “relevant to the case.”
- The firm and its two top execs were sued by the SEC last year for selling XRP tokens illegally.
Brad Garlinghouse’s lawyers are requesting for Binance’s documents to challenge the U.S. Securities and Exchange Commission (SEC) lawsuit against Ripple. Garlinghouse, the CEO of Ripple Labs, was sued by the SEC alongside Chairman Chris Larsen late last year. The regulator claimed illegal sale of over $1.38B of the digital asset XRP, violating the 1933 Securities Act.
Binance Holdings Limited, the Cayman Islands-based subsidiary of the world’s largest crypto exchange, is now involved. This follows a Monday filing of court documents in the Southern District of New York on behalf of Garlinghouse. According to Garlinghouse’s legal advisors, the requested documents are “relevant to the case and unobtainable through other means”.
Additionally, the filing cited the US laws concerning the Department of State and The Hague Convention. Garlinghouse’s lawyers then sought a request letter to the Cayman Islands’ Central Authority to compel evidence from Binance.
Ripple on domestic versus international XRP sale
In a filling, Ripple notes;
Mr. Garlinghouse seeks foreign discovery based on his good faith belief that [Binance Holdings Limited] possesses unique documents and information concerning this case, and specifically, concerning the process by which transactions in XRP allegedly conducted by Mr. Garlinghouse on foreign digital asset trading platforms were conducted,
Specifically, the lawyers are challenging SEC allegations of unauthorized sale of 357 million XRP tokens by Ripple CEO. The SEC argues that the tokens were sold through “worldwide” crypto trading platforms to investors “all over the world.” Citing Section Five of the Securities Act of 1993, the team said that the alleged illegal XRP sale applied solely to domestic sales and offers of securities. The documents requested from Binance may contain evidence that supports this claim.
The lawyers said;
As the SEC knows, Mr. Garlinghouse’s sales of XRP were overwhelmingly made on digital asset platforms outside of the United States […] the discovery that Mr. Garlinghouse seeks will be relevant to demonstrating that the offers and sales that the SE challenges did not occur in this country and are not subject to the law that the SEC has invoked in this case,
Since last year, Ripple’s legal team has maintained that XRP tokens are like Bitcoin and Ether. The two are classified by the US regulator as commodities and not securities. XRP sale, as per the lawyers, is therefore not an “unregistered, ongoing digital asset securities offering” as the SEC claims.
Lately, however, Ripple has tried to set itself loose on the grounds of domestic versus international XRP sales. In June, Garlinghouse and his partner, Larsen filed a motion to grant them access to what they consider crucial evidence. The pair petitioned international authorities to request documents from a number of non-US-based crypto exchanges. These include Bitstamp, Huobi, and Upbit. Reportedly, the case will conclude the pre-trial discovery process on Oct. 15.