Ripple Labs Challenges SEC's Request for Financial Disclosure, Questions Relevance and Timing
Summary:
Ripple Labs' legal team argues against the U.S. Securities and Exchange Commission's (SEC) request for financial disclosure, claiming it's both overdue and irrelevant. In recent demands, the SEC sought Ripple's financial reports for 2022 and 2023, and information of contracts and proceeds related to XRP sales after the initial filing. Ripple counters these requests stating discovery phase is overdue and questioning the validity of post-complaint discovery in this case. Ripple's lawyers argue against the SEC's portrayal of their company and its use of interrogation resources. Ripple and the SEC's legal dispute is set to commence in April.
Ripple Labs' legal representatives have stated that the U.S. Securities and Exchange Commission's (SEC) latest request for disclosure of financial documents is both past the deadline and irrelevant, thereby rendering it invalid. On January 19, in a newly filed court document, Ripple's lawyers argued that the SEC has shifted its position on acquiring more information during the discovery phase, which necessitates the exchange of relevant documents among the conflicting parties in a legal matter.
Only last week, the SEC demanded that Ripple release its audited financial reports for the fiscal years 2022 and 2023, disclose contracts related to XRP sales to external entities subsequent to the original filing, and provide further insights on the institutional proceeds from XRP sales after the initial filing. However, Ripple counters that the discovery phase is overdue and the SEC had plenty of chances to request the required material during this phase. Ripple insists that any post-complaint discovery is unnecessary and had not been previously argued by the SEC to be relevant to the case.
The Ripple legal team further argued against the portrayal of the SEC's case against the blockchain payment company, indicating that the court should not be influenced by it. They further took issue with SEC's interrogation approach, asserting that SEC exhausted all its interrogation resources, which are a series of written queries provided to Ripple before the trial.
The legal battle between Ripple and the SEC is scheduled to begin in April. The SEC first launched charges against Ripple in December 2020, alleging the company of raising capital through the sale of unregistered security through XRP. Nonetheless, Ripple achieved a partial triumph in the case in July 2023 when the judge ruled that XRP was not a security in the context of programmatic sales on crypto exchanges. Recently, Ripple's chief legal officer, Stuart Alderoty, labelled the SEC as an "out-of-control regulator" due to its position on cryptocurrencies.
Published At
1/20/2024 8:48:31 AM
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