Ripple has rejected demands by the United States Securities and Exchange Commission (SEC) to provide terabytes of Slack communications as part of the ongoing investigation into the alleged XRP sales securities breach.
Ripple Wants To Quash SEC’s Request For Slack Messages
According to the SEC, Ripple refused to produce over 1 million messages which corroborate testimony that the fintech’s employees communicated often by Slack and were in fact necessary for the regulatory agency to “build a complete and accurate record for summary judgment and trial”. The SEC also argued that these documents would help refresh the recollections of Ripple employees at trial.
On August 16, Ripple’s legal team wrote a letter to U.S Magistrate Judge Sarah Netburn, calling for her to deny SEC’s request. They argued that collecting and reviewing all the requested Slack data is “extraordinarily burdensome and highly disproportionate”. The filing stated:
“Seeking the collection of up to one million Slack messages from an additional 13 custodians and according to Ripple’s e-discovery vendor, could cost nearly $1 million just to collect and process the data, not to mention the additional cost of hosting, reviewing and producing the data — which is more than Ripple has spent to date on e-discovery costs in this litigation.”
Building on this line of argument, Ripple’s lawyers also indicated that the said Slack messages would significantly prolong the discovery phase. The blockchain firm’s e-discovery vendor estimates that it would possibly take approximately 12 to 15 weeks to collect the communications, which doesn’t include the time it would take for Ripple to review the messages. This means that granting SEC’s request would alter the current scheduling order.
Arguing further, the letter posited that the additional Slack messages requested are “neither critical nor uniquely relevant” as the SEC has not explained adequately why the “Missing Documents” would almost assuredly refresh the witnesses’ memories.
In another line of argument, the letter noted that SEC’s request should be dismissed because multiple other federal courts have thrown out similar discovery requests.
“Other courts that have considered similar discovery requests for Slack data have ruled that Slack discovery is uniquely burdensome and costly and have ruled against motions to compel their production in cases where the moving party has already obtained significant discovery.”
Other Related Developments
James Filan, a lawyer in the Ripple community, told his over 46,000 Twitter followers yesterday that Ripple has filed a Motion to Seal exhibits attached to the agency’s motion regarding Slack messages, as well as exhibits attached to its opposition to the request. The two parties presently don’t agree on what should be sealed, per Filan.
“XRPCommunity #SECGOV v. #Ripple #XRP Ripple filed a Motion to Seal exhibits attached to the SEC’s Motion regarding Slack communications and to Seal exhibits attached to Ripple’s opposition to the SEC’s Motion. The parties currently do not agree on what should be sealed.”
Ripple’s legal team claims that this information is not relevant to the public and could be detrimental to the firm by exposing sensitive business-related data.
Meanwhile, XRP is trading at around $1.1 at press time and has lost roughly 5.94% over the past 24 hours.