A federal judge has rejected Ripple’s request to force the United States Securities and Exchange Commission (SEC) to disclose whether it previously allowed its employees to trade XRP.
The second requires its employees to seek authorization before trading in a security. However, the SEC had not adopted any policy prohibiting its employees from trading digital assets until January 2018, according to Ripple.
Ripple says the SEC’s policy at the start of 2018 for employees said that digital assets could be subject to the SEC’s prohibitions against securities transactions, but the agency “neither declared all digital assets as securities nor considered whether a particular digital asset is a security in the SEC. view. “
Four months after the SEC released its internal policy, the agency added XRP to a “watch list” of entities potentially subject to additional ethics rules. The regulator ultimately banned its employees from trading the crypto asset, but not until March 2019, according to Ripple. It was at this point that he issued a “formal order of investigation” into the San Francisco-based payment company.
Earlier this month, attorneys for Ripple argued that the SEC’s internal policy calendar indicated that it had not concluded whether the sales and offers of XRP were securities transactions until at least January 2018. .
The San Francisco-based company asked if any employees asked to trade XRP, Bitcoin, and Ethereum during the period when there was no clear policy on the asset, and what the SEC allowed them or not to do. .
The SEC then quickly asked the court to dismiss Ripple’s petition on the grounds that any information regarding their employees’ trading history is irrelevant to the case. The regulator also said it would be an invasion of privacy.
U.S. trial judge Sarah Netburn sided with the SEC on Tuesday, decision that such information would not provide any clarification as to whether XRP is security or not.
“Because the preclearance process ignores the fact that an asset is a title, the defendants have not shown that such individual business decisions impact the issues in this case. While SEC policies (or the lack thereof) may provide relevant evidence related to fair notice or recklessness, the way an ethics counselor viewed a business decision is more likely to cause confusion or to create collateral disputes.
Netburn also claims that the information is not significant enough to warrant intrusion into the private financial conduct of SEC employees, even in an anonymized or aggregated form.
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