Ripple resists SEC’s post-complaint discovery, deeming it irrelevant and procedurally improper.
SEC seeks audited financials and post-complaint contracts from Ripple.
In the ongoing legal saga between Ripple Labs and the U.S. Securities and Exchange Commission, the latest development reveals Ripple’s strong opposition to the SEC’s motion seeking audited financial statements and details on post-complaint contracts. The SEC had requested information regarding the sale or transfer of XRP to “non-employee counterparties” and the amount of “XRP Institutional Sales proceeds” received after the lawsuit filing.
Ripple’s legal team, in a court filing on January 19, vehemently opposed the SEC’s motion, asserting that the SEC’s arguments lacked merit. One key argument presented by Ripple is that the SEC failed to request this discovery during the open fact discovery period, and therefore, lacks good cause for seeking further information related to post-complaint sales.
Furthermore, Ripple argued that the SEC had initially deemed post-complaint conduct as irrelevant to the case. Ripple’s lawyers urged Judge Analisa Torres to rule in their favor, pointing out what they perceive as irrational arguments by the SEC.
SEC Statement
The SEC’s motion specifically requested audited financial statements for 2022-2023, contracts related to the sale or transfer of XRP to “non-employee counterparties,” and information on “XRP Institutional Sales proceeds” received after the lawsuit filing. Legal experts, including attorneys Jeremy Hogan and Bill Morgan, weighed in on the matter.
Hogan noted that the SEC’s pursuit of relatively minor discovery disputes suggests a weakening position, while Morgan highlighted the potential litigious nature of determining whether post-complaint sales meet legal criteria.
As the legal battle unfolds, Ripple’s objections centered around the timeliness of the SEC’s requests and the perceived irrelevance of the information sought to the court’s determination of remedies. Despite Ripple’s arguments, the SEC, in a reply filed on January 24, maintained the procedural propriety of its discovery requests and emphasized the relevance of the information in shaping remedies for securities law violations.
The intricacies of this legal tussle continue to draw attention, with the outcome poised to have implications for Ripple, the SEC, and the broader cryptocurrency industry.