After granting Ripple access to internal SEC communications last week, the presiding judge has now denied a motion to publish financial records linked with Ripple co-founder Chris Larsen and CEO Brad Garlinghouse, who are named defendants in the case.
The SEC had hoped the financial data may help advance its case against Ripple and its executives, who stand accused of violating federal securities law through the ongoing sale of XRP to the public.
However, it was decided the disclosure would represent an unwarranted invasion of privacy and that funds delivered from crypto exchanges to the defendants could not be tied categorically to the sale of XRP.
“The SEC’s belief that the Individual Defendants’ banking records might show evidence of a speculative transaction that could have occurred (and that the Individual Defendants are not providing in their XRP transaction records) is not a foundation on which to order expansive discovery into personal financial accounts,” ruled Magistrate Judge Sarah Netburn.
The SEC filed its lawsuit against Ripple and its executives in December, blindsiding the company and sending the price of XRP tumbling.
The case hinges on the classification of XRP as a security (i.e. a financial asset from which the investor intends to profit), as opposed to a currency or medium of exchange. By failing