Brad Garlinghouse's attorneys are requesting Binance documents to challenge the US Securities and Exchange Commission's (SEC) lawsuit against Ripple. Garlinghouse, the CEO of Ripple Labs, was sued by the SEC along with Chairman Chris Larsen late last year. The regulator claimed the illegal sale of more than $ 1.38B of digital asset XRP, in violation of the Securities Act of 1933.
Binance Holdings Limited, the Cayman Islands-based subsidiary of the world's largest cryptocurrency exchange, is now involved. This follows Monday's filing of court documents in the Southern District of New York on behalf of Garlinghouse. According to Garlinghouse's legal advisers, the requested documents are "relevant to the case and impossible to obtain by other means."
In addition, the presentation cited US laws relating to the State Department and the Hague Convention. Garlinghouse's lawyers then requested a letter of request from the Cayman Islands Central Authority to obtain evidence from Binance.
Ripplen in the sale of XRP national versus international
In a filler, Ripple notes;
Mr. Garlinghouse seeks an overseas discovery based on his good faith belief that (Binance Holdings Limited) possesses unique documents and information about this case, and specifically, about the process by which the XRP transactions allegedly made by him Mr. Garlinghouse in foreign digital asset trading platforms were carried out.
Specifically, attorneys are challenging the SEC's allegations of the unauthorized sale of 357 million XRP tokens by the CEO of Ripple. The SEC argues that the tokens were sold through global cryptocurrency trading platforms to "investors from around the world." Citing Section Five of the Securities Act of 1993, the team said that the alleged illegal sale of XRP applied only to domestic sales and offerings of securities. Documents requested from Binance may contain evidence to support this claim.
The lawyers said;
As the SEC knows, Mr. Garlinghouse's XRP sales were overwhelmingly made on digital asset platforms outside of the United States (…) the discovery Mr. Garlinghouse is seeking will be relevant in demonstrating that the offers and sales he challenges the SEC did not occur in this country and are not subject to the law that the SEC has invoked in this case.
Since last year, Ripple's legal team has maintained that XRP tokens are like Bitcoin and Ether. Both are classified by the US regulator as commodities and not as securities. The sale of XRP, according to the lawyers, is therefore not an “ongoing and unregistered digital asset securities offering” as the SEC claims.
Lately, however, Ripple has been trying to break free for domestic versus international XRP sales reasons. In June, Garlinghouse and his partner, Larsen, filed a motion to grant them access to what they consider crucial evidence. The pair asked international authorities to request documents from a number of cryptocurrency exchanges outside of the US including Bitstamp, Huobi, and Upbit. The case will reportedly conclude the pre-trial discovery process on October 15.