A judge overseeing discovery in the U.S. Securities and Exchanges Commission’s lawsuit against Ripple Labs has granted the SEC’s request to extend deadlines by 60 days as well as a request by co-defendants Ripple CEO Brad Garlinghouse and executive chairman Chris Larsen to obtain information from 16 cryptocurrency exchanges outside the United States.
- In a ruling on June 14, U.S. Magistrate Judge Sarah Netburn extended the deadline for the warring parties to complete fact discovery and expert discovery by Aug. 31 and Oct. 15 respectively. Discovery is the formal process of exchanging information between the parties in litigation. The SEC made the request, saying the agency needed more time to investigate and review documents produced by Ripple. However, Ripple had opposed the SEC’s request, calling the delay “an existential threat” to its business in the United States.
- Separately, Netburn granted a request from Ripple’s CEO Brad Garlinghouse and executive chairman Chris Larsen to obtain documents related to their XRP accounts and XRP transactions from 16 foreign cryptocurrency exchanges. Garlinghouse and Larsen have argued that their XRP sales were “overwhelmingly made” on cryptocurrency exchanges outside the United States and that “the SEC’s failure to allege domestic offers and sales should be fatal to its claims for the reasons set out in the Individual Defendants’ respective Motions to Dismiss.”
- Jesse Hynes, general counsel at Gala Games, said on Twitter: “I feel very positive about the result of this lawsuit, just not the timeline. Ripple may very well lose this suit, but the overall effect could still be a win for Ripple and the crypto space as a whole… So, a result of this lawsuit could be learning that while Ripple sales are investment contracts, secondary sales aren’t — meaning that exchanges can relist. Then Ripple will just continue selling outside of the U.S and everything will resume as normal.”