The United States Securities and Exchange Commission (SEC) has intensified its demands in the ongoing XRP lawsuit against Ripple Labs Inc. On January 11, 2024, the SEC filed a motion in the Southern District of New York, requesting Ripple to produce two specific categories of documents.
The first demand is for Ripple’s financial statements for the years 2022 and 2023. The SEC’s request is driven by the need to determine appropriate remedies, including injunctions and civil penalties, in light of Ripple’s financial condition.
The second demand is for documentation of Ripple’s post-Complaint contracts governing “Institutional Sales.” The SEC deems these documents critical for determining the appropriate remedies, such as injunctions and civil penalties, against Ripple.
The SEC’s objective is to aid Judge Torres in determining whether, after finding Ripple liable for violating Section 5 of the Securities Act of 1933, the Court should impose relief such as injunctions and civil penalties and, if so, in what amount. The focus is on understanding Ripple’s conduct since the original complaint was filed and assessing the potential for future violations.
Ripple has opposed these demands, arguing that the SEC’s request exceeds the permissible scope of discovery. They assert that the request for post-Complaint financial documents and contracts is not only burdensome but also irrelevant to the case’s remedies phase.
The SEC counters this stance, arguing that Ripple’s ongoing business activities, specifically its Institutional Sales of XRP post-Complaint, are central to the question of whether Ripple should be enjoined from future securities law violations. The SEC justifies this by stating that this information is particularly central to the injunctive relief inquiry because Ripple appears to argue it should not be enjoined on the basis that its future sales of XRP are or will be exempt from registration or the reach of the federal securities laws.
The SEC also emphasizes the importance of understanding Ripple’s current financial condition to determine the appropriate amount for any civil penalties. The motion states that Ripple’s current financial condition and the actual total amount it received from its violative Institutional Sales is fundamental to tailoring a penalty to deter future violations.
On July 13, 2023, Judge Analisa Torres delivered a summary judgment in the XRP lawsuit, determining that XRP’s public exchange sales did not equate to unregistered securities offerings, while institutional sales were classified as such. In October, the SEC’s request for an interlocutory appeal was rejected. The SEC also retracted its allegations against Ripple’s CEO Brad Garlinghouse and Executive Chairman, previously accused of aiding in securities law violations in relation to XRP sales.
The trial between the SEC and Ripple is set to commence on April 23, 2024, with the final pretrial conference scheduled for April 16, 2024. At press time, XRP traded at $0.59877.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Brad Garlinghouse, Analisa Torres |
| Companies | Chainalysis, Ripple Labs Inc., United States Securities and Exchange Commission (SEC), TradingView.com |
| Currencies | XRP |
| Securities | None |
