Ripple Faces SEC’s Request
In a closely watched case in the cryptocurrency industry, a federal judge has signed an order allowing the U.S. Securities and Exchange Commission to request certain financial documents from Ripple. Magistrate Judge Sarah Netburn granted the SEC’s motion demanding that Ripple produce financial statements covering the years 2022 and 2023, as well as contracts governing XRP’s ‘institutional sales’.
Significance of Requested Documents
The post-complaint contracts could enable the SEC to refute Ripple’s claims that its conduct has complied with the court’s guidelines since the initial filing of the complaint.
Because the SEC has sufficiently demonstrated that this information can assist the Court in shaping its judgement, Ripple must respond to the inquiry.Magistrate Judge Sarah Netburn
Ongoing Dispute and Repercussions
The SEC filed its lawsuit against Ripple and its executives, Brad Garlinghouse and Chris Larsen, in December 2020, alleging that the parties had offered unregistered securities through XRP tokens. In July 2023, a judge granted summary judgement in favor of Ripple, ruling that XRP was a security only when sold to institutional investors.
The SEC has since dropped its charges against Garlinghouse and Larsen.
Evolution of the SEC vs Ripple Trial
The SEC vs Ripple trial is scheduled to begin in April. The SEC’s request for information was deemed ‘late’ and insufficiently justified by Ripple’s legal team in a letter dated January 19. However, Judge Netburn has set a deadline of February 12 for Ripple to comply with the order.
