The commission argued that Ripple’s motion, if granted, would open the floodgates for the company to request testimony from high-ranking government officials.
The ongoing lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission, or SEC, continues with the regulatory body claiming that XRP token holders are targeting its members on social media platforms with allegedly false statements.
In a Thursday motion addressed to Judge Sarah Netburn in the Southern District of New York, the SEC has requested a conference to discuss quashing the motion from Ripple to subpoena the former director of the regulatory body’s division of corporation finance, William Hinman. The SEC argued that Ripple’s motion, if granted, would set a precedent for the company to be allowed “a parade of requests for the testimony of high-ranking government officials,” and interfere with U.S. government operations.
“Allowing Defendants [Ripple] to depose Director Hinman would likely result in Director Hinman being served with multiple deposition subpoenas by the many other persons alleged to have violated the registration provisions of the securities laws during his tenure at the SEC,” said the motion. “Such a result would not only create significant burdens for Director Hinman, but would make other qualified individuals reluctant to serve in high-ranking roles at the SEC for fear of being embroiled in litigation for years following their terms of service.”
However, one of the SEC’s arguments in the motion against letting Ripple depose Hinman is XRP token proponents — also known as the XRP Army — allegedly using social media “to disseminate negative and false statements about members of SEC leadership,” including the former director. The commission claimed that the deposition coupled with the social media attention could deter individuals from seeking positions in public service.
The SEC filed a lawsuit against Ripple in December, alleging the firm, CEO Brad Garlinghouse and co-founder Chris Larsen had been conducting an "unregistered, ongoing digital asset securities offering" with their XRP token sales. In the aftermath of the commission’s announcement, several crypto exchanges have suspended the trading of XRP or delisted the token entirely. Garlinghouse also said in March that Ripple had agreed to “wind down” its partnership with global money transfer service MoneyGram.
Related: US isn't prepared to regulate new industries like crypto, says Ripple CTO
In response to the SEC lawsuit, Ripple has claimed that XRP is more like Bitcoin (BTC) or Ether (ETH), both of which the regulatory body has classified as commodities rather than securities. Members of the XRP Army have also seemingly focused much of their online activity around the SEC case with Ripple, specifically mentioning Hinman.
Some of the ideas on social media pushed by XRP token holders about the SEC leadership include that members of the commission are working to make China’s economy greater than that of the United States, requests that former chairperson Jay Clayton and Hinman be investigated, and the occasional comparison of one or more members to lizard people:
So it is our friend Hinman! I can’t imagine what they may want to discuss. pic.twitter.com/2hmiId75zM
— Jungle Inc (@jungleincxrp) June 25, 2021
XRP Army members have also started an online campaign to get exchanges to relist the token amid the SEC lawsuit. In April, the price of XRP reached a yearly high of $1.78 and stayed above the $1.00 level for a month. At the time of publication, XRP is $0.63, having fallen more than 35% in the last 30 days.
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