By
Temitope Olatunji
April 18th, 2024
The request was granted by US Magistrate Judge Sarah Netburn to Garlinghouse’s motion to Obtain international discovery of Binance records.
In what is an unexpected twist in the ongoing case between crypto firm Ripple and the United States Securities and Exchange Commission (SEC), the company was earlier this week granted access to the Binance documents.
The demand for the records by Ripple became necessary after the selling of unregistered securities was added as part of the case against the company.
In this case, the SEC claims that Ripple’s CEO Brad Garlinghouse sold more than 357 million XRP tokens on crypto trading platforms to investors all over the world.
This prompted the legal team representing the Garlinghouse to request for documents relevant to the case and unobtainable through other means from Binance Holdings Limited on August 2.
The filing stated that the CEO sought foreign discovery on the basis of his good faith belief that Binance possessed unique documents and information concerning this case.
The records concern XRP transactions that were allegedly conducted by Garlinghouse and may provide evidence that the Ripple executive made the transactions outside the jurisdiction of the SEC.
According to the filed memorandum, “Mr. Garlinghouse seeks foreign discovery on the basis of his good faith belief that the listed entity possesses unique documents and information concerning this case, and specifically concerning the process by which transactions in XRP were allegedly conducted by Mr. Garliinghouse on foreign digital asset trading platforms were conducted.”
Thus, this means that the US securities act only applies to domestic sales and offers. Going by this, the SEC’s claim of global violation becomes unfounded as the sales of the Ripple’s native token were majorly overseas.
The memorandum also noted that the SECs failure to allege domestic offers and sales should be fatal to its claims for the reasons set out in Mr. Garlinghouse’s Motion to Dismiss.
The request was granted by US Magistrate Judge Sarah Netburn to Garlinghouse’s motion to Obtain international discovery of Binance records.
However, according to the docket, while the approval was granted on August 3, the request for a duplicate was denied.
“ORDER granting 274 Letter Motion for Discovery. The Court will communicate with counsel to arrange delivery of the letters.”
The lawsuit began in December 2020 when the SEC filed against Ripple alleging that Garlinghouse and co-founder Chris Larsen had been conducting sales of unregistered, ongoing digital asset security offering with their XRP token sales.
While the crypto firm has denied any wrongdoing and argues that its crypto asset is a medium of exchange that is used for international transactions.