- Judge Sarah Netburn has ordered Ripple Labs to handover more than 1 million slack messaged to the SEC.
- Ripple claimed that the initial incomplete messages was due to a data processing error.
Amid the ongoing legal battle between Ripple Labs and the US Securities and Exchange Commission (SEC), the court has ordered Ripple to submit more than 1 million Slack messages to the SEC. The order was given by US Magistrate Judge Sarah Netburn of the Southern District of New York.
As the legal war between Ripple and the SEC continues, the regulator sought to access Slack messages among the company’s employees. With the new court order, the technology company is under instruction to hand over more than 1 million Slack messages between employees to the SEC.
Judge orders Ripple to submit Slack messages to SEC
It’s no news that the SEC has a case against Ripple, claiming that the multi-billion dollar company sold unregistered securities. When the regulator demanded access to Ripple’s Slack messages, the company countered the request. According to Ripple, complying with the request will cost up to $1 million. On the other hand, the Commission stated that the slack messages were “relevant to the parties’ claims and defenses and proportional to the needs of the case.”
The judge has pointed out that the Slack messages stand and critical messages to the Ripple vs. SEC case. Judge Netburn declared:
Any burden to Ripple is outweighed by its previous agreement to produce the relevant Slack messages, the relative resources of the parties, and the amount in controversy.
Although Ripple submitted some Slack messages to the SEC in August, the regulator said they appeared incomplete. Initially, Ripple Labs argued against it, denying the claim. After the denial, the company claimed that the messages were incomplete due to a data processing error. Ripple said the technical issue caused the loss of over a million messages that were missing.
As the battle wages on, the SEC referred to Ripple’s failure to present the complete messages as “highly prejudicial.” For that reason, the watchdog concluded that the missing messages would be highly relevant to the case. The SEC contended:
These messages include: (a) discussions about Ripple’s desire to create speculative trading in XRP, (b) the effect of Ripple announcements and efforts on, and Ripple’s concerns as to, the price of XRP, the relationship and central importance of XRP sales to Ripple’s overall business, and (d) regulatory status of XRP.
Ripple and SEC’s legal war
The legal clash between Ripple and the SEC started last year, directed at the company and its initial and current CEOs. The Commission filed the suit against Ripple Labs, the co-founder Christian Larsen, and CEO Bradley Garlinghouse. The SEC accused the defendants of the sale of unregistered securities.
In reaction to the lawsuit, the price of XRP dropped 24 percent. As several exchanges stopped XRP trading due to the suit, the crypto shed 41percent in three days over the news. Trading below $1 when the legal war began, XRP has increased significantly since then. At press time, the cryptocurrency is up 0.69 percent to $1.26.