Ripple has filed a motion seeking the court’s approval to request documents from 15 digital currency exchanges in its legal battle against the U.S. Securities and Exchange Commission (SEC). The payments company is seeking to prove that the XRP sales its executives made were beyond the jurisdiction of the U.S. watchdog.
Ever since Ripple was slapped with a securities violation lawsuit by the SEC, it has fought back through different defenses. Its first was that XRP wasn’t a security. In time, it would introduce and latch on to its second defense—that the SEC didn’t give fair notice. It pointed to the nine years it took the SEC to file the lawsuit and “confusing” statements about BTC and Ether by William Hinman, a former SEC executive, to support this defense.
The latest defense by Ripple is targeting challenging the SEC’s jurisdiction authority over the exchanges its executives used to sell their XRP. In an amended complaint in February, the SEC claimed CEO Brad Garlinghouse and chairman Chris Larsen had sold billions of XRP and it was seeking disgorgement from the two.
Now, the San Francisco-based company hopes that documents from 15 global exchanges can help its case against the watchdog. Ripple is seeking to request the documents from iFinex (the parent company of Bitfinex), OKEx, Huobi, Bithumb, Upbit and Bitlish. Other exchanges it intends to reach out to are BitForex, HitBTC, AscendX (formerly BitMax), Bitstamp, Bitrue Singapore, ZB.com, BitMart, Coinbene and Korbit.
These exchanges are all located outside of the United States, and most don’t serve U.S. clients. Their headquarters are scattered across South Korea for Upbit and Bithumb, Malta for OKEx, Seychelles for Huobi Global, and the U.K. for Bitlish and HitBTC.
In a memorandum of law in support of their request for the documents, the two executives outlined that “the listed entities possess unique documents and information concerning this case, and specifically, concerning the process by which transactions in XRP allegedly conducted by the Individual Defendants on foreign digital asset trading platforms were conducted.”
Larsen and Garlinghouse further argued that the Securities Act—which the SEC is pinning its case against them on—“applies only to domestic sales and offers of securities.” This should be enough to have the case dismissed, they believe.
They continued, “If this case were to proceed past that stage, however, the discovery that the Individual Defendants seek will be relevant to demonstrating that the offers and sales that the SEC challenges did not occur in this country and are not subject to the law that the SEC has invoked in this case.”
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