If Ripple Labs executives had hoped a change in leadership at the Securities and Exchange Commission (SEC) would dial back momentum on the agency’s case against the crypto company, they have at least received their answer.
The SEC, in a court filing Wednesday, accused Ripple of trying to "harass" the regulator — and of "gamesmanship with respect to discovery," Bloomberg reported. Ripple had asked a judge to force the SEC to submit internal emails and other communications on officials’ personal devices.
The regulator in December sued Ripple, its CEO and its co-founder for allegedly violating investor-protection laws by selling nearly $1.4 billion in XRP, the digital asset the company’s founders developed in 2012. The agency is calling the coin an unlicensed security, but Ripple’s leadership contends it is merely a medium of exchange.
The SEC also said that Ripple’s CEO, Brad Garlinghouse, and co-founder Chris Larsen "created an information vacuum" that allowed them to sell XRP into a market that only had information they chose to share.
Garlinghouse blasted the agency’s timing — the lawsuit came about a week before then-SEC Chairman Jay Clayton was set to leave office. "Clayton did this with one foot out the door. Rather shamefully, he has decided to sue Ripple, and leave the legal work to the next chairman," Garlinghouse said.
Less than a week into new SEC Chairman Gary Gensler’s tenure, the legal battle continues. Gensler, who led the Commodity Futures Trading Commission during the Obama administration, was tapped by President Biden in January to lead the SEC.
Digital asset enthusiasts may be looking for the — er, ripple effect of a ruling in the case since the agency doesn’t seem to consider tokens such as Bitcoin and Ether to be securities — a notion Ripple told the court in December "amounts to picking virtual currency winners and losers."