Ripple is to hand over one million missing Slack messages between its employees which the Securities and Exchange Commission (SEC) has sought to access. This as U.S. Magistrate Judge Sarah Netburn has ordered.
Ripple’s defense challenged the order and said that complying would cost them up to $1 million. The judge nonetheless believes the messages are critical and provide unique evidence in the SEC’s ongoing lawsuit over the sale of allegedly, unregistered securities. A case that is nearing the one-year mark since the SEC filed suit against Ripple Labs and its CEOs, Christian Larsen and Bradley Garlinghouse in December of 2020.
In the original motion to compel Ripple, the SEC argued that the messages between Ripple employees were “relevant to the parties’ claims and defenses and proportional to the needs of the case.” On the same day, August 9, the U.S. watchdog also demanded that Ripple would share all messages from 22 email custodians in addition to the Slack messages.
Although Ripple initially denied the claim, the SEC told Judge Netburn that the Slack messages which Ripple produced appeared to be incomplete. Nonetheless Ripple retracted their statement and accounted to a data processing error that led to the company only producing a small amount of the messages, with more than one million messages missing.
The SEC then attacked Ripple’s failure to produce complete records stating that the remaining is highly relevant:
“These messages include: (a) discussions about Ripple’s desire to create speculative trading in XRP, (b) the effect of Ripple announcements and efforts on, and Ripple’s concerns as to, the price of XRP, the relationship and central importance of XRP sales to Ripple’s overall business, and (d) the regulatory status of XRP.”
While Ripple challenged this, Judge Netburn responded on Thursday that Ripple will have to comply. The judge said:
“Any burden to Ripple is outweighed by its previous agreement to produce the relevant Slack messages, the relative resources of the parties, and the amount in controversy.”
The case pre-trial discovery process will end in little over a month, on October 15.
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