Sealed documents opened in Ripple case: What do lawyers say?

In the case between Ripple and the SEC, these documents came to light after the court decided to open some sealed documents. So far, two documents have been published, consisting of legal advice that Ripple received years ago.

The documents in question reveal some of the consultancy and legal advice given to Ripple in the past years. Two legal notes surfaced late yesterday.

In a February 2012 memo, attorneys for Perkins Cole LLP law firm advise against selling coins to Ripple. It is stated that in the case of selling coins to investors, the risk that the coins will be considered as investment contracts and therefore classified as securities will increase.

In the second note, the risk of being security appears less
On the other hand, the second note from the same company in October of that year warned that XRP may not be considered a security under federal law, but the SEC may approach the issue differently.

Making a statement following the release of the documents, Stuart Alderoty, Ripple General Counsel, said, “The documents reveal a legal analysis Ripple received in 2012 that XRP is not a security. Ripple's request for such advice in 2012 is something to be applauded. Surprisingly, it took eight years for the SEC to claim that they disagreed with this analysis as XRP is traded on a huge global market.” said.

“Overall positive for Ripple and individual defendants”
Attorney James K. Filan said the documents were generally positive for Ripple and the individual defendants. Filan made the following assessment:

“The first note was prepared in February 2012 and sent to Jed McCaleb and Jesse Powell. It is stated that if NewCoin is sold, it will be seen as a security. However, Ripple later revised its business plan and asked for a new recommendation from Perkins Coie, who published a second memo in October 2012. This second note was sent to Chris Larsen and Jed McCaleb. The October rating is more positive and concludes that there is a small risk that the SEC will disagree, 'Ripple Loans' should not be considered securities. The note also suggested some steps that Ripple could take to minimize risks regarding the SEC.”

Filan also emphasized that the notes show how careful Ripple is trying to be, “There is absolutely nothing in these notes to suggest that Ripple acted recklessly or ignored significant risks. In fact, the notes show the opposite. Ripple was acting carefully.” he said.

What happened?

The US Securities and Exchange Commission (SEC) sued Ripple and co-founder Christian Larsen and CEO Bradley Garlinghouse in December 2020. Arguing that XRP is a security, the institution claimed that the two names sold XRP to investors without registering it with the SEC, and they made a profit of $ 600 million.

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